Interview: Gregory Fayet
Which factors make Saudi Arabia an attractive destination for clean energy investment?
GREGORY FAYET: Saudi Arabia’s energy transition started in 2017 when the country undertook projects in solar and wind power generation totalling 5000 MW. Looking ahead, the country has set ambitious targets in terms of reducing its carbon footprint and expanding capacity by developing low-carbon energy solutions. These goals are already generating positive results.
There are three major reasons for the Kingdom’s growing importance in the field of renewable energy. First, the climatic conditions in the country make solar and wind energy attractive options throughout the year. Second, there is ample space for the construction of large solar plants and wind farms. Lastly, the government’s support, combined with the financing capacity available, provides the necessary fiscal security for the development of such large-scale projects.
The government has a clear vision on how the local energy mix must evolve, with a deep understanding of the country’s energy needs in the coming years. As of mid-2022 Saudi Arabia had approximately 60 GW of installed electricity capacity, a fraction of which comes from renewable sources. Therefore, the opportunity for growth in the segment is significant.
In this context, EDF Renewables is working with partners to develop two major projects that support decarbonisation. The first one is a 400-MW wind farm in Dumat Al Jandal, which already powers over 70,000 households. The second project is a 300-MW utility-scale solar park in Jeddah. The success of these projects is due to the overall competitiveness of the local market and the potential for further large-scale projects. One factor that makes such projects bankable is the tariffs applied, which are just above $16 per MWh for solar power and just below $20 per MWh for wind power. Given these favourable conditions, the demand for renewable energy generation is expected to continue its upwards trajectory in Saudi Arabia.
In what ways can international partners help further develop local human capital and encourage job creation in renewable energy?
FAYET: International partners should invest with a long-term vision to support the energy transition in the Kingdom. Moreover, most of the utility-scale renewable projects are located far from developed regions. The Dumat Al Jandal wind farm is located in the Al Jawf region, 900 km north of Riyadh. Some 600 people were employed on-site during the construction phase. Such projects present ample room to collaborate with other stakeholders, deploy technology, develop local human capital and ensure knowledge transfer. The skill of local engineers in the sector is well established, and younger generations have shown initiative to work in the renewable energy space. International companies can contribute by adhering to global standards and providing fresh graduates with experience beyond the Kingdom. We aim to provide new talent with know-how and perspectives they can bring back.
How do you envision local research and development (R&D) will contribute to global efforts in sustainable energy generation and storage?
FAYET: Saudi Arabia has developed important R&D capabilities in recent decades to drive research and innovation and improve performance in all areas.
Given the unique climatic characteristics of the country, the local R&D ecosystem is making great strides in generating technological solutions. Moreover, there is scope to continue supporting the Kingdom in R&D across all aspects of the energy industry, including producing and storing energy from solar and wind sources, energy systems, zero-emissions mobility, low-carbon hydrogen, smart technologies and hybrid solutions. While the Kingdom is effectively advancing global efforts to reduce the impact of climate change, international partners can further contribute by adapting R&D outcomes to local conditions.