Saudi Arabia will have to screen its Solar PV Power Generation against Coronavirus

In the last decade, Saudi Arabia has stepped up to become the Gulf leader in solar PV power generation.

During the World Economic Forum held in Davos last January, Saudi Arabia Energy Minister, HRC Prince Abdulaziz, quite enthusiastically announced that the country was “involved in a transformative effort”, to convert its power sector energy mix in order to become “one of the top producers of renewable energy in the Arab peninsula” by 2030.

Since the signing of the OPEC+ agreement, Saudi Arabia has been cheering the outcomes of an unusually prolonged stability in oil markets. However, following the coronavirus outbreak, a strategic tangle with Russia over producers’ commitments to tackling the slump in oil demand drove prices down to historic lows. Hence, oil prices recovery-related uncertainties are likely to compromise the kingdom’s efforts to bolster its renewables industry.

In 2016, Saudi Arabia issued a document entitled Vision2030, a strategic framework to reduce the country’s dependency on oil, diversify its economy and develop strategic public services such as health, education, infrastructures and tourism. According to the document, the kingdom acknowledges that the renewable power sector has been lagging in terms of installed capacity and efficiency. Consequently, it sets an initial target of 58,7 GW – or a 15 per cent share of its total energy mix – of total renewables installed capacity to be achieved by 2030 as well as the localisation of portions of the new energy value chain – such as R&D and manufacturing – in the Saudi economy. 


The Saudi population has seen rapid growth throughout the last couple of decades. It was slightly off 21 million in 2000, and it has now reached 34 million (World Bank, 2020). Moreover, the country’s societal structure has undergone several changes, for the ramping economic development has poured millions of people from rural areas towards the urban centres. As a result, domestic energy demand and total energy consumption have also increased exponentially. Demand for electricity has been growing at an annual rate of 8 per cent. The IEA reports electricity consumption rose by 89 per cent in 2006-2016, passing from 168 TWh to 319 TWh. In particular, if we consider that Saudi Arabia has one of the highest energy consumption rates per capita – 8954 kWh/capita in 2018 – future outlooks point to the necessity for the kingdom to rely on a diversified as well as flexible energy mix.  

Saudi Arabia’s Minister of Energy, HRC Prince Abdulaziz bin Salman in Davos for the World Economic Forum Credits: REUTERS/Denis Balibouse

According to the Saudi Electricity & Cogeneration Regulatory Authority (ECRA), 57 per cent of electricity generation is made up by natural gas, 19 per cent by crude oil, 23 per cent by High Sulphur Oil (HFO) – cheap and dirty fuel used for ships and power plants – and 3 per cent by diesel. The majority of the natural gas utilised to produce electricity consists of associated gas, which is extracted along with crude oil as it is pumped out the well (EIA, 2019). The contribute from renewables is almost negligible, for solar PV, wind generation and other clean energy sources together do not come up to 1 per cent of the total energy mix. 

At the policy and regulatory levels, electricity prices in Saudi Arabia are still subjected to governmental subsidies. In 2012, the average price for residential end-users was $0,020/KWh, ten times lower than in the UK (Saudi Electricity Company, 2020). According to a study, the size of energy subsidies in Saudi Arabia amounts to $80 billion, some 11 per cent of the country’s GDP. Of these, electricity’s net subsidies make up 3 per cent of the country’s GDP (Sarrakh et al., 2018). However, under the King Salman Renewable Energy Initiative, authorities in Riyadh have started to roll out several actions in order to progressively clear subsidies from the electricity market and support the development of a renewable industry. As an example, in 2018, a threefold increase in the electricity tariff was applied to end-users by Saudi ECRA.


As regards solar PV power generation, Saudi Arabia has enormous potential for exploiting this energy source. Its geographical characteristics, cloudless skies and vast unused lands all make the kingdom a suitable place for setting up tons of solar PV power plants (Titli 2014). Moreover, investing in decentralised facilities could ease transmission and distribution companies off the burden of distributing electricity across miles and miles of scarcely populated areas such as in the southern and eastern regions of the country. 

There are many other advantages for more and more efficient grid-connected solar power plants. On the one hand, solar energy’s flexibility comes in handy face exceeding peak-load demand, especially in hot and dry summer days, given the extensive use of AC appliances all over the country. On the other, higher shares of renewables would free fuels for exportation, thus increasing the stream of oil revenues into the kingdom’s hauls. As internal consumption of oil has increased from 2,4 mb/d in 2007 to 3,8 mb/d in 2017, it has also been eating into export capacity. Investing in renewable energies would indeed reduce over-reliance on hydrocarbon resources and keep them as a source of income.  


In 2010, the establishment of King Abdullah City for Atomic and Renewable Energy (KA CARE) aimed at “building a sustainable future for Saudi Arabia”, and the King Abdullah City for Science and Technology (KACST) marked a concrete milestone towards an enhanced renewable energy awareness in the kingdom., particularly as regards solar PV power generation. Fallings costs, increased reliability and efficiency have indeed driven solar PV technologies to commercial acceptance. Besides, solar energy gaines importance when it comes to fuel water pumping and desalination facilities. Given its water’s chronic scarcity, Saudi Arabia needs to provide disposable water to its citizenship in the most cost-effective way possible. In recent times, major desalination projects involving solar PV technologies have been under scrutiny from Saudi utilities in partnership with international firms. As an example, in 2016, the Advanced Water Technology (AWT), a subsidiary of TAQNIA, the commercial arm of the KACST, in collaboration with German Siemens, led off the construction of the world’s first large-scale solar-powered reverse desalination plant in the eastern city of Al-Khafji. More recently, Saudi Aramco – the country’s oil major – has started exploring solar PV utilisation for remoted facilities in upstream and downstream operations. 

The 300 MW Sakaka PV project. Credits: ACWA Power

Several projects are currently underway. Whereas the 300 MW installed capacity Sakara solar PV power plant is planned to be built in the next years, Riyadh, through its National Renewable Energy Program (NREP), has recently issued an international audit seeking for companies interests in building four more solar PV power plants in the country. Moreover, in August 2019, the Saudi Press Agency reported solar fuelled water purification pumps had been successfully deployed in Al-Mahra Governorate, in North-East Yemen, in compliance with the Saudi Program for the Development and Reconstruction of Yemen. It is worth to remind that Saudi Arabia is involved in a dreadful conflict against the Houthi movement in Yemen since 2015. 

Interestingly enough, Saudi Arabia and the UAE are currently joint-venturing the construction of solar PV power plants abroad. Last March, the two countries’ major utility companies – the Saudi ACWA Power and the Emirati Masdar – began to pick up contracts in order to develop up to 5 GW of solar power in Uzbekistan. Allegedly, in a bid to establish themselves as main regional actors in the renewable energy industry.  


Nevertheless, uncertainties over future Saudi commitment to renewables development are related to the ongoing coronavirus crisis. In the last two months, oil demand has dropped dramatically worldwide with skirmishes between Saudi Arabia and Russia over producers’ output curtailments further affecting oil markets. Prices have plunged to historical lows and recovery seems far-fetched while the world remains awash with oil. Such grim conditions may as well bring countries to review their renewable projects, including Saudi Arabia. At a time when authorities are called upon to take bold decisions, if the kingdom wants to consolidate itself as a hub for renewables development, it will have to carry on its ambitious projects so as not to lose momentum. 


  • Al-Taibi Zaid S. et al. (2019), Current status and future perspectives for localizing the solar photovoltaic industry in the Kingdom of Saudi Arabia, Springer
  • Al-Tamini N. (2020), GCC Economies to Struggle After Oil Prices “Go Corona”, ISPI. Available at:
  • Bahgat G. (2013), Alternative Energy in the Middle East, Palgrave Macmillan
  • BP (2018) Statistical Report
  • Electricity & Cogeneration Regulatory Authority (ECRA)
  • EIA (2019), Saudi Arabia Used Less Crude Oil for Power Generation in 2018. Available at:
  • King Abdulaziz City for Atomic and Renewable Energy (KA CARE)
  • IEA (2019), World Energy Outlook
  • National Renewable Energy Program (NREP)
  • Saline Water Convertion Corporation SWCC (2018), Annual Statistical Booklet
  • Sarrakh R. et al. (2018), Impact of subsidy reform on the kingdom of Saudi Arabia’s economy and carbon emissions, Energy Strategy Reviews 28 (2020)
  • Saudi Electricity Company SEC (2020)
  • Tariq U. et al. (2019), Challenges towards renewable energy: an exploratory study from the Arabian Gulf region, ICE Publishing
  • World Bank Data

Published by guglielmozangoni

Wannabe many things. The more energy-related, the better. Meantime, I received a BA in International Sciences and Diplomacy (SID) from the University of Trieste (Italy), and I earned an MSc in Strategic Studies and Energy Security from the University of Aberdeen (UK). In love with Energy and Geopolitics.

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