- More than 1.7 GW of solar capacity has been allocated so far.
- Two solar projects totalling 1 GW of combined capacity in March.
- Saudi Arabia had about 518 MW of installed solar capacity as of 2021.
According to Fitch Solutions, Saudi Arabia, one of the leading oil producers globally, is expected to deploy 5.1 GW of solar capacity between 2022 and 2031, going by the country’s huge potential and ambitious decarbonisation targets.
Under the country’s National Renewable Energy Programme (NREP), as a part of its vision 2030, ambitious targets have been set. The country seeks to increase the share of renewable energy and gas to about 50%. It also plans to reduce the use of liquid fuel to diversify the energy mix in the country’s power generation system. Under NREP, more than 1.7 GW of solar capacity has been allocated, and large-scale green hydrogen projects are also in the plan, according to Fitch Solutions.
Saudi Arabia awarded two solar projects totalling 1 GW combined capacity in March. The International Company for Water and Power Projects, ACWA Power, won a 25-year power purchase agreement (PPA) for the 700 MW Ar Rass solar photovoltaic (PV) project to be built in the central part of Saudi Arabia. Jinko Power Technology Co Ltd got the second project. The Chinese company will construct a 300 MW solar park in the central province, about 80 kilometres from the capital Riyadh.
Even though the country has huge potential and high targets, analysts from Fitch still remain cautious in their forecast because the sector is still largely underperforming based on the government’s targets till now. The growth of solar power in the kingdom is expected to face some resistance due to the existing restrictions on foreign private ownership in the industry and the dominance of the large state-owned utilities.
Although the forecast is for only 5.1 GW of solar deployment over the next decade, Fitch Solutions stressed that Saudi Arabia has significant upside potential.