In 2023, where is the increase in mainland photovoltaic exports? If Europe sprang up last year to promote the high growth of mainland photovoltaic industry exports, then who will be this year's Taurus customers and surprise soldier market?
Some long-time readers who have followed Carbon Rush believe that there may be great opportunities in the Middle East this year. Today, I will take you to understand a little first.
Sakaka Photovoltaic Independent Power Plant in Saudi Arabia with 300MW installed capacity and investment of SAR 1.2 billion (US$320 million)
01
Saudi Arabia's renewable energy ambitions
Saudi Arabia, in its Vision 2030 development strategy, announced that renewable energy will account for 50% of the country's energy mix by 2030. Saudi Arabia plans to install 27.3GW of renewable energy by 2023 and 58.7GW by 2030. To that end, the Saudi government has decided to invest up to 380 billion riyals ($101 billion).
When it comes to renewable energy, Saudi Arabia's power sector faces numerous challenges. Of course, this also means opportunity.
Saudi Arabia's photovoltaic is inseparable from Saudi Arabia's sovereign wealth fund Public Investment Fund, abbreviated as "PIF", which plays a leading role in the development of Saudi photovoltaic power plants.
PIF has set a goal of developing 70% of Saudi Arabia's renewable energy capacity by 2030. The fund's annual investment in Saudi Arabia is $40 billion.
Currently, the fund holds a 50% stake in local utility ACWA and 100% stake in hydropower holding company Badeel.
On November 30, 2022, ACWA Power signed an agreement with Badeel to build the world's largest single-site solar power plant in Al Shuaibah, Makkah province. The solar power facility is expected to start operations by the end of 2025 with a generating capacity of 2,060MW. The two companies are also developing a 1.5GW solar facility in Sudair.
02
Progress is lagging, and now it may be forced
Recently, GlobalData released a new research report – Saudi Arabia Electricity Market Size and Trends, by Installed Capacity, Power Generation, Transmission, Distribution and Technology, Regulations, Key Players and Forecasts, 2022-2035.
At the current rate of renewable energy development, Saudi Arabia is not even close to its 2023 target, and the 2030 target now looks a bit out of reach, the report notes.
Saudi Arabia's current renewable energy capacity increase is expected to increase the country by an average of 0.1GW per year between 2010 and 2021, which will eventually lead to a shortfall of up to 25.8GW in its 2023 target.
According to the report, Saudi Arabia's economy is largely dependent on oil exports. Saudi Arabia's GDP increased from US$528.2 billion in 2010 to US$692.3 billion in 2021, at a CAGR of 2.5% (constant interest rate). The service sector dominates the country's GDP.
The government has recently paid more attention to industrial development. However, a lack of transparency in governance, a shortage of skilled workers, political instability in neighboring countries, and slow industrialization have created uncertainty about Saudi Arabia's clean energy goals.
However, in the view of the carbon call, the economic and trade cooperation between China and Argentina has been expanding. In 2023, if some difficulties and obstacles can be eliminated, Saudi Arabia's photovoltaic market can still be expected.
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Abundant resources, China's actions
Since the discovery of oil in the Saudi desert by a group of U.S. geologists 80 years ago, Saudi Arabia's vast crude oil reserves, estimated at one-fifth of the world's total, have been the main engine of its economic growth and a major source of its international influence.
But Saudi leaders are now looking to tap another abundant resource: solar energy. Because of the local sunshine resources, it is too enviable. Riyadh, for example, is the capital and largest city of Saudi Arabia with a population of over 7.3 million. The city is predominantly hot desert climate, not only very hot but also sunny, with an average of 3225 hours of sunshine per year, ranking seventh among major cities in the world.
In 2018, Crown Prince Mohammed bin Salman signed a $200 billion deal with Japan's SoftBank Group to build a solar park in his kingdom that could generate 200GW of electricity by 2030. That's a staggering number, equivalent to about half of the world's solar capacity at the end of 2017. However, this cooperation did not continue.
Source: China Energy Construction official website
On November 13, 2022, the Saudi Al Shubah 2.6 GW photovoltaic power plant project undertaken by China Energy Construction officially started. The project is located in the Al Shubakh area of Jeddah City, Mecca, Saudi Arabia, and is jointly undertaken by China Energy Construction International Group, Guangdong Thermal Power and Northwest Institute. The project adopts the world's most advanced N-type bifacial photovoltaic module and flat single-axis automatic tracking bracket, which is the largest single photovoltaic power station project under construction in the Middle East and North Africa.
In the past few decades, Saudi Arabia's renewable energy industry has been described as a roller coaster, whenever the momentum of acceleration is about to begin, the speeding car stops, and then moves again, but does not give those potential investors enough confidence to accelerate forward.
This time, we should expect more.
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