Interview: Majid Refae
Where do you identify the immediate priorities for public and private stakeholders in green energy generation in Saudi Arabia?
MAJID REFAE: Saudi Arabia has implemented several renewable energy initiatives since 2011, including the National Renewable Energy Programme in 2017. The launch of the Saudi Green Initiative in 2021 showed the country’s commitment towards the goals set by the programme. Since hosting the G20 in 2020, the Kingdom set a goal to achieve a mix of 50% conventional and 50% renewable energy by 2030. In line with the target to meet net-zero emissions by 2060, green energy is expected to provide the generation capacity needed to meet rising market demand.
Saudi Arabia sits at the centre of the Sun Belt region, giving it access to maximum solar radiation. In addition to the concentrated solar power that can be generated in coastal areas, its combination of highlands and lowlands puts the Kingdom in a position to harness wind resources for energy generation. Indeed, solar has the potential to account for 60% of additional capacity expected to come online, while wind would account for 20-30%. Moreover, the Kingdom’s industrialisation strategy offers an opportunity for green technology manufacturers to develop their capacity to export to other countries.
What steps can help Saudi Arabia achieve a 50% share of renewables in the energy mix by 2030?
REFAE: Shifting trends in the global economy and the Covid-19 pandemic recovery are factors that must be considered when working towards attaining the renewable energy target for 2030. The pandemic-induced disruption in China heavily influenced the value chain necessary for achieving the energy mix target. With the pandemic still affecting China, access to critical resources and minerals remains challenging. Therefore, there is a need to increase the local content strategy to a point where at least 50% of essential materials needed for production are sourced from local manufacturers. This will also enhance the availability of renewable energy products in the market that are produced locally.
In this context, agencies and ministries in Saudi Arabia are pursuing programmes and providing incentives to support local manufacturers in expanding and exporting their products to other countries. The aim is to enhance economies of scale so that the Saudi market will have sustainable supply and producers will witness high margins.
In what ways can local research and development (R&D) enhance renewable energy technologies?
REFAE: The Saudi government plans to build a renewable energy oasis, which will involve the development of an institution that will centralise all renewable energy-related R&D activities in the Kingdom and make it a centre for clean energy innovation. This would entail the creation of R&D labs, training programmes and technical support activities. Once complete, the proposed institution will provide R&D support to universities, the private sector and government institutions. It will enhance R&D activities in the Kingdom, bringing better localisation of renewable energy technologies and contributing to global efforts.
How do you foresee growth opportunities evolving for solar energy businesses, and where do you identify relevant investment opportunities?
REFAE: The Saudi government’s ambitious energy and net-zero targets aim to achieve the need for increased local renewable energy production capacity to 58.7 GW by 2030. In the long term, the target to achieve net-zero emissions by 2060 will unlock further growth opportunities in energy efficiency and security. The Kingdom will be looking to adopt new green technologies, build strong R&D capabilities and develop partnerships with innovative industry players.