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‘Renewable energy absolutely necessary’ – Saudi

Renewable energy absolutely necessary for Saudi

Oil saving win-win drives Saudi solar power boom...

May 23, 2013 4:56 by



A slide in solar power costs and a surge in oil prices over the last few years has made solar power a win-win strategy for Saudi Arabia: saving billions of dollars of crude for export while making electricity at less than half the cost.

Riyadh plans to install 41,000 megawatts (MW) of solar power over the next 20 years, but to date has built only 12 MW – or less than even Britain installed in early May.

Despite year round sunshine, the oil and gas rich countries of the Gulf have lagged far behind most of the world in solar power – so far. Saudi energy officials have talked of becoming major solar players for years, but while China built 5,000 MW in 2012 alone, Saudi solar capacity is still insignificant.

That is set to change, with an economic argument too strong to ignore.

“Saudi Arabia is determined to diversify its energy sources and reduce its dependence on hydrocarbons,” saidWail Bamhair, the project manager for the Saudi team that visited the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) last week.

“Renewable energy isn’t just an option, but absolutely necessary. We have the means to build renewable energy, and we need to do it,” he said in a statement published on the NREL website during the Saudi delegation’s visit on May 13.

Five years ago, high costs made harnessing the sun’s rays an uneconomic way to make electricity and development was driven mostly by environmental concerns of European politicians.

Thanks largely to multi-billion dollar subsidies, Europe had 70,000 MW of solar photovoltaic installed by the end of 2012, compared to a global total of 102,000 MW, according to data from the European Photovoltaic Industry Association.

Dim growth in debt-ridden Europe, combined with a trade spat that could limit EU panel sales to China, means the Saudi programme is a vital potential export market – and the economics should now guarantee that it takes off.

Solar panel prices have fallen more than 80 percent over the last five years, because of global over-supply and lower demand in Europe, while average annual Brent crude prices have risen by a third, making the sun a very cheap source of electricity for a country that currently burns oil which it could export for over $100 a barrel.

After years if stalling on solar, Saudi authorities now appear to be moving quickly to capitalize on the slump in costs, with contracts for the first round of 500-800 MW of solar power expected before the end of 2013 and a target of over 5,000 MW installed in the next five years.

“Solar in the Middle East is not being prompted today based on environmental or reputational concerns. It is simple economics,” Michael Parker, an energy analyst at Bernstein Research said in a May 10 note.



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