The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Saudi Arabia Launches Massive Renewable Program with Hybrid FITs

While North America continues to dawdle on the road to the renewable revolution, the conservative, oil-rich Kingdom of Saudi Arabia has proposed one of the most sweeping and massive moves to renewable energy on the planet.

In typical Saudi fashion, where everything from oil fields to opulence is done on a colossal scale, the proposed renewable program is gargantuan.

Starting from zero, the Kingdom plans to install a staggering 54,000 MW of renewable-generating capacity during the next two decades.

For comparison, the United States, with more than ten times the population of Saudi Arabia's 27 million inhabitants, operates about 50,000 MW of solar panels and wind turbines. 

Peak Oil & Crash Solar Program?

While the move to renewables is significant in itself, it raises an even bigger question. Do the Saudis see the handwriting on the wall of the Kingdom's fossil fuel endowment? Are they, for the first time, acknowledging limits?

Every kilowatt-hour generated with renewables is a kilowatt-hour that doesn't have to be generated with natural gas or oil, leaving more to sell on the international market. This would only be important to the Saudis if they realized — at some level — that there were finite limits to oil and gas in the kingdom.

The Saudis have been among the staunchest defenders of the "no need to worry, move along" school of oil-resource cornucopians. "We have oil aplenty and can always be counted on whenever there's a crisis in world oil production," has been their mantra — at least in public.

Could the announcement of the Saudi program mark a turning point in the Kingdom's attitude toward natural resources, or is it just hard-headed economics finally winning out?

With oil trading at over $100 per barrel, the avoided cost of offsetting the use of fossil fuels--the "opportunity cost," as the Kingdom's consultants call it — is already much higher than the cost of solar power today, justifying the huge undertaking.

Still, there's no escaping the fact that whatever the reason, the move is momentous.

Proposal Not Final

The proposal for the King Abdullah City for Atomic and Renewable Energy (KA-CARE) procurement program was announced at a conference in Saudi Arabia earlier this month. KA-CARE's board has yet to approve the proposal but is expected to do so shortly.

The objective is to generate one-quarter of the Kingdom's electricity from solar energy alone, while developing a domestic renewable energy industry. The latter is a key part of the program.

While much of the renewable energy trade press has focused on the amount of solar photovoltaic (solar PV) capacity proposed, an even larger amount of Concentrating Solar Power (CSP) is anticipated. The program's initial targets are 

  • CSP: 25,000 MW,
  • Solar PV: 16,000 MW, and
  • Wind: 9,000 MW.

Interestingly, the amount of electricity generated by 9,000 MW of wind at moderately windy sites is of the same order of magnitude as the 16,000 MW of solar PV — even in sunny Saudi Arabia.

Feed-in Tariffs to Build Out Program

The Kindgom's conservative world view is revealed in the hybrid nature of their proposal. The KA-CARE program will begin with two rounds of bidding for solar PV, CSP, wind, geothermal and waste-to-energy capacity.

The first round of bidding will take place in 2013.

  • Solar PV: 1,100 MW
  • CSP: 900 MW
  • Wind: 650 MW
  • Geothermal & Waste-to-Energy: 200 MW

The second round of bidding will take place in 2014.

  • Solar PV: 1,300 MW
  • CSP: 1,200 MW
  • Wind: 1,050 MW
  • Geothermal & Waste-to-Energy: 250 MW

But unlike other jurisdictions that have recently opted for renewable auctions, Saudi Arabia plans to move quickly to feed-in tariffs to build out the program, because of their simpler administration. This may occur as early as 2015.

Of the 54,000 MW in the proposed program, nearly 90 percent of the capacity will be assigned through the application of technology-differentiated feed-in tariffs.

Here are some of the program's key elements.

  • Maximum project size: No limit
  • Minimum project size: 5 MW
  • Technology specific targets: Flexible
  • Term: 20 years
  • Evaluation: Price and non-price factors
  • Feed-in tariff launch: After second auction
  • Review: Every three years
  • Localization: Domestic content requirements

The Saudi proposal makes it clear that this program is as much about industrial policy as it is energy policy. The Saudis want to be as influential internationally in renewable energy as they are now in oil exports. Toward that end, the Saudis emphasize that price is a factor, but only one factor, determining how much of which technology is developed and — equally as important — who gets to participate in the program.

The Saudi announcement could well send such powerful shock waves through the world's oil industry that they reach the highest levels of policy makers in Canada and the USA, leading them to reconsider their recalcitrance toward the renewable revolution sweeping the globe.

Image: Ing. Schieder Markus via Shutterstock

Untitled Document


Sunrise in Pakistan as the Country Delves into Solar PV

Robert Harker Pakistan has joined the list of countries that are exploring solar power as a means to bridge critical energy generat...

Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

Why Smarter Grids Demand Smarter Communications Networks

Mark Madden

Historically, utility networks and communications networks have had little in common.

The Importance of “Switching Costs” to the US Residential Solar Industry

Paula Mints The DoE and numerous organizations and governments globally are focused on driving down the cost of solar convinced t...


AWS Truepower Announces Major Expansion of its Due Diligence Team in Response to Growing Market Demand

AWS Truepower, an international leader in wind and solar energy consulting and engineer...

20 days to GRC Annual Meeting & GEA Geothermal Energy Expo

The Geothermal Resources Council (GRC) has announced that it is only 20 days to go to t...

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...


How To Get People To Do Stuff

It’s no secret that psychology and sales go hand in hand. If you understand the principles of human psychology ...

Get In The Groove

When we talk about strategies for boosting productivity, we often overlook the fact certain projects lend themselves ...

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...


Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize its impact on the environment and the communities of which it is a part. For his efforts,...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Intersolar Europe 2016

Exhibition: June 22-24, 2016; Conference: June 21-22, 2016 Intersolar Eu...

Intersolar India 2015

Exhibition and Conference: November 18-20, 2015 Intersolar India 2015 I...


Less Is More

When you’re giving a presentation, one of the easiest things to do...


One of the biggest challenges we face as efficiency sales professionals ...

How To Optimize Your Meeting Schedule

Do you spend more time in meetings than you do actually working? While m...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now