Dual Advantage To Saudi With Investment In Solar And Wind
The kingdom has made CO2 pledges to go greener and cleaner. ACWA Power, headquartered in Saudi Arabia, are at the forefront of the region's most ambitious renewables programme. In the past year, Saudi Arabia has committed to having 50% of its electricity come from renewable sources by the year 2030.
That's an increase from less than 1 GW of solar and wind power to more than 50 GW in just over seven years. The state-backed ACWA is the primary developer of renewable energy projects.
Riyadh vowed in October 2021 and reaffirmed at COP27 this month to reduce its emissions to net zero by 2060, and a successful state-backed plan would signal a major shift in the monarchy and be crucial to achieving that goal.
While the country's reliance on fossil fuels, officials insist that Saudi Arabia is committed to combating climate change and adjusting to the energy transition, despite reaping a massive petrodollar windfall from oil prices pushed up by Russia's invasion of Ukraine.
They point to Riyadh's launch of its "green initiative" last year, with goals including planting 10bn trees in the kingdom, as evidence. Other examples given include plans to harness emissions generated by the production of hydrocarbons by developing carbon capture and storage technology, and aspirations to become the world's top exporter of clean hydrogen.
According to Energy Minister Prince Abdulaziz bin Salman, incorporating more gas and renewables into the energy mix and freeing up oil for export could result in a net savings of $130bn for the kingdom between now and 2030.
Currently, oil and associated liquids account for little under half of Saudi Arabia's electricity, with the country burning an average of 1 million barrels of crude and related liquids per day to power its energy grid and run essential facilities like air conditioning and desalinization. For the rest, natural gas is the principal source of energy.
To guarantee oil's continued inclusion in the future energy mix, the Saudi government has mobilised in support of an "oil sustainability programme," which includes the use of polymer-based products in concrete, roads, tiles, and packaging.
In a country where summer temperatures can reach around 50C, air conditioners account for more than two-thirds of household electricity usage and hence account for roughly 40% of Saudi Arabia's total electricity consumption. U.S. data from the International Energy Administration ranks the nation of around 34 million people as the world's eleventh greatest consumer of energy in 2020.
Prince Mohammed's pet project, Neom, is a massive development on the kingdom's western coast that is designed to run on renewable energy. Other ambitious goals include making Riyadh one of the top 10 wealthiest cities in the world and attracting $425 billion in investment to the country's industrial and logistic sectors over the course of a decade.
Six years ago, planners predicted that by 2030, local energy demand will have increased by a factor of three. The current installed energy capacity is roughly 85GW, and it is expected to be expanded to about 140GW by 2030.
While maintaining the oil industry is a top priority, the leaders' top priority is developing a backup plan in case oil demand suddenly drops.