Through its Energy Minister Prince Abdulaziz bin Salam, Saudi Arabia reveals the country’s intention to generate half of its power from renewables by 2030. Although the mission seems extrapolated, the upgrade of the energy diversification strategy will foster a hypersonic transition to renewables.
The projection of this strategy seems overwhelming in comparison to the current utility of renewable energy sources. A report by the General Authority on Statistics indicates that about 2% of the renewable energy being utilized in the domestic sector, especially solar power, to meet the electricity demands of the residents.
Saudi Arabia is a fossil fuel producer, and the high cost of renewable energy makes it hard to shift the attention of electricity producers from cheap oil. Even though the price of solar energy is drastically plummeting worldwide in the past ten years, the value is still higher than that of oil and natural gas in Saudi Arabia.
Nonetheless, Prince Abdulaziz stated that the country would initiate a solar energy project to generate electricity at the lowest price globally. He reiterates that this move will facilitate a quick transition to renewables. The strategy that they intend to deploy is creating awareness or educating the young generation of Saudis on minimizing carbon emissions.
Studies indicate that Saudi Arabia is advantageous in tapping solar energy due to its inclination towards the sun and the sunny climate. This energy venture will be growing on a commercial scale. One of the successful initiatives for renewable energy in the country is King Abdulaziz City for Science and Technology, which is essentially a solar energy research center to the North of Riyadh. This venture began in 2011. Another power plant launched in the same year is on the island of Farason.
With the cost of solar energy dropping by approximately 90%, citiz3ns living in remote areas with low national grid accessibility have been able to connect to solar power. These residents install solar panels in their homesteads and utilize the energy obtained for domestic purposes.
The gulf countries and Saudi Arabia are focusing on the differentiation of the energy mix. This move will minimize their dependence on fossil fuels and thereby reduce carbon emissions. The countries are keenly focussing on diversification to solve this challenge and counter climatic changes resulting from the use of fossil-fuel usage.
The first strategy is to escalate the share of non-oil products in the GDP. The second step is the government creating revenue streams from the non-oil product manufacturers in the form of taxes and returns for these investments. Taxation paves the way for these products to enter the GDP of the countries. Next, the state will support the export of non-oil products to raise its share in this market.
Finally, these strategies will help countries meet their goal of minimizing global warming. It is also visible that it is less susceptible to disruption than oil and natural gas from proximity to political wars. Thus, the more these projects disperse and decentralization, the higher their chance of positively impacting the economy of Saudi Arabia.