Renewable Energy Industry in the Kingdom

The Renewable Energy Industry in the Kingdom of Saudi Arabia refers to the policies and efforts implemented by the Kingdom to harness its potential in the field of renewable energy and develop a competitive sector within it. The Kingdom has recognized the importance of diversifying energy sources to achieve economic stability for its citizens in both the medium and long term.

The Kingdom has taken a series of measures to diversify its energy sources, including launching the National Renewable Energy Program (NREP) to enhance its position in the energy sector and utilize renewable energy to meet the growing demand for electricity.

NREP is a strategic initiative under the umbrella of Saudi Vision 2030 and the King Salman Renewable Energy Initiative. It aims to increase the Kingdom's share in renewable energy production to the maximum extent possible.

NREP has embarked on a specific roadmap to diversify local energy sources and stimulate economic development, leading to sustainable economic stability in the Kingdom, in line with the goals of Saudi Vision 2030. This includes establishing a renewable energy industry, supporting the development of this promising sector, and fulfilling the Kingdom's commitments to reduce carbon dioxide emissions.

The renewable energy programs undertaken by the Ministry of Energy aim to support the development of this sector by mobilizing private sector investments and encouraging partnerships between the public and private sectors. This is to create a competitive domestic market for renewable energy, enhancing opportunities for the emergence of a new industry for renewable energy technologies. The sites designated for renewable energy projects are selected by a specialized Saudi technical team to achieve the highest possible quality in electricity production. Renewable energy projects also contribute to shaping the features of the circular carbon economy adopted by the Kingdom and supported during its presidency of the G20 in 2020. This aims to reduce carbon emissions from the energy sector in the Kingdom.

In 2021, the Ministry of Energy inaugurated the Sikaka Solar Power Plant project, marking the beginning of renewable energy projects in the Kingdom. It has a production capacity of three hundred MW. During the inauguration ceremony, agreements for purchasing power for seven other renewable energy projects in various provinces of the Kingdom were signed, involving five investment alliances consisting of twelve Saudi and international companies.

The new projects are located in al-Madinah al-Munawarah, Sudayr, al-Qurayyat, al-Shuaibah, Jeddah, Rabigh, and Rafha. The total capacity of these projects, in addition to the Sikaka and Dawmat al-Jandal projects, is 3,670 MW. They will provide electricity to more than six hundred thousand residential units and will reduce over seven million t of greenhouse gas emissions.

Some of these projects have achieved new world record figures, represented by recording the lowest cost for purchasing electricity generated from solar energy globally. The cost of purchasing electricity from al-Shuaibah project reached USD0.104 (1.04c) per KWh.

The Dawmat al-Jandal Wind Farm project produces approximately four hundred MW. The Sudayr project, a photovoltaic power project, has a capacity of 1,500 MW, while al-Qurayyat project has a capacity of two hundred MW, al-Shuaibah project has a capacity of six hundred MW, the Jeddah project has a capacity of three hundred MW, the Rabigh project has a capacity of three hundred MW, the Rafha project has a capacity of twenty MW, and al-Madinah al-Munawwarah project has a capacity of fifty MW.

The total capacity of these projects, in addition to the two projects in al-Jawf Province: Sikaka Solar Power Plant and Dawmat al-Jandal Wind Farm, is 3,670 MW. The new projects are characterized by being implemented through Independent Power Producers (IPP). The purchase of the energy generated by these projects will be done through power purchase agreements lasting between twenty and twenty-five years with the Saudi Power Procurement Company.