Saudi Arabia is seeking investors for a $109 billion plan to create a solar industry that generates a third of the nation’s electricity by 2032, according to officials at the agency developing the plan.
The world’s largest crude oil exporter aims to have 41,000 megawatts of solar capacity within two decades, said Maher al- Odan, a consultant at the King Abdullah City for Atomic and Renewable Energy. Khalid al-Suliman, vice president for the organization known as Ka-care, said on May 8 in Riyadh that nuclear, wind and geothermal would contribute 21,000 megawatts.
“We are not only looking for building solar plants,” al- Odan said in an interview in Riyadh yesterday. “We want to run a sustainable solar energy sector that will become a driver for the domestic energy for years to come.”
The comments highlight the scale of Saudi Arabia’s ambitions to boost renewable energy use as a way to pare back on oil consumption used for domestic desalinization and power plants, potentially saving 523,000 barrels of oil equivalent a day over the next 20 years.
For the solar panel manufacturers such as First Solar Inc. (FSLR) and SunPower Corp. (SPWR), the Saudi Arabian market would open a huge new market as European countries reduce subsidies to keep a lid on installations. Panel sales may dip this year for the first time in more than a decade from 27,700 megawatts installed last year, according to a survey of analysts by Bloomberg on March 9.
“These markets are likely to be a lot less profitable than existing markets,” Vishal Shah, an analyst at Deutsche Bank AG in New York, wrote in a note to clients yesterday, noting the Saudis may require bid winners to supply from factories built in the nation. “It looks like both First Solar and SunPower would need to set up local manufacturing.”
First Solar dropped 4.9 percent yesterday, taking its slide this year to 55 percent. SunPower slid 0.7 percent, for a 16 percent decline this year.
Ka-care is the government agency set up in April 2010 to oversee the nation’s renewable energy strategy. Its plans are likely to be approved later this year, al-Suliman said, according to a copy of the presentation he gave on May 8.
The government is targeting 25,000 megawatts from solar thermal plants, which use mirrors to focus the sun’s rays on heating fluids that turns a power turbine. Another 16,000 megawatts would come from photovoltaic panels, according to the Deutsche Bank note.
Heavyweights lead index drop on Muscat bourse
Selling pressure in index heavyweights weighed on the MSM 30 Index which declined 0.39 per cent to close at 5,726.16 points. The MSM Shariah Index closed at 874.98 points, down 0.07 per cent.