January 31, 2023

Saudi Arabia To Invest $270 Billion In Clean Energy

Saudi Arabia will spend some $270 billion (1 trillion riyals) on low-carbon energy projects by 2030, energy minister Abdulaziz bin Salman said, adding the Kingdom will also invest in modernizing its grid.

“We are determined to be the leading exporter of hydrogen, as well as to provide clean hydrogen for local uses in heavy industries to produce green products such as green steel, green aluminum, fertilizers, and others at competitive prices,” bin Salman said, speaking at the in-Kingdom Total Value Add Forum and Exhibition, as quoted by Al Arabiya.

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The ultimate goal for the kingdom, the energy minister said, would be to become an electricity exporter. It is to this end that the government in Riyadh would aim to expand the country’s transmission and distribution network.

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Despite its status as the world’s largest oil exporter, Saudi Arabia has signaled it has ambitions in low-carbon energy as well. Under its Vision 2030 program, the kingdom would aim to boost the share of renewable energy in its mix to 50 percent by that year. The other 50 percent is planned to come from natural gas rather than oil, which is what the kingdom uses in massive amounts currently to generate electricity.

In wind and solar, Saudi Arabia has perhaps one of the most ambitious capacity-building targets in the world. In 2030, the kingdom should have some 58 GW of wind and solar energy capacity, which would compare with less than 1 GW currently.

“Yes, it’s ambitious, [but] it’s been done in a heartbeat in China, it’s been done on a significant basis in India,” Paddy Padmanathan, the chief executive of Saudi utility ACWA Power, told the FT last year. “Money is not in short supply [and] the commitment is there from the procurer. The supply chain, yes it’s a challenge, but it’s not insurmountable.”

By Irina Slav for Oilprice.com

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