Photo credit: AKlion via Bigstock.

By Anders Lorenzen

Saudi Arabia, as an Arab country with its economy built on oil, is in the process of diversifying its energy economy to launch a push for renewable energy.

So says the Saudi Energy Minister, Khalid al-Falih, explaining that they plan to launch tenders for at least 12 renewable energy projects in 2019.

The kingdom burns about 700,000 barrels per day of oil for electricity in the hottest months from May to August. And in order to deal with this, they have hiked the price of petrol and electricity for its citizens to curb domestic use of crude and export more.

The Energy Minister said that this policy is already starting to bear fruit as the government expects energy consumption to fall by 1.5 to 2 million barrels a day by 2030. Minister al-Falih said, “Since reforms were put in place, we have noticed a growing public interest in energy efficiency, and a clear change in behaviour”, and explained that gasoline demand fell 8 percent in 2018 compared to 2017, and electricity demand had also dropped.

Falih added, “Over the coming decade, liquids burning in our utilities will be virtually eliminated, while the share of gas capacity will grow from around 50 percent currently to nearly 70 percent, which will be the highest among the G20.”

Burning oil is one of the most inefficient ways of generating electricity, and very few countries still do so. The Saudi policy is likely based more on economic gains rather than on concerns about climate change, as each barrel of oil they do not burn, the more they can export.

The Energy Minister was short on details, and he did not give information about any specific projects. He said that in the next ten years he expects Saudi Arabia to develop 60 gigawatts (GW) of renewable energy capacity, with solar representing 40 GW and wind power 1.6 GW.

But he said that the Energy Ministry would work with the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), in its push to develop renewable power capacity, “The PIF and its selected partners will develop 70 percent of the total renewable energy capacity with the objective of accelerating the localization of our manufacturing capability.” Additionally, the desert kingdom has said it is implementing a deal with Japan’s Softbank to develop solar power.