Vision 2030 and solar energy: A timely development

With the launch of the vision document, solar energy industry can now stop speaking in speculative terms

Ahmed S. Nada

Published: Updated:

Much has already been said about the potential for the Kingdom of Saudi Arabia to harness the power of solar energy. In the years that I’ve been in the solar energy industry, rarely a conference goes by that does not have a segment dedicated to talking about the country and how renewable energy must be factored into its future.

With the launch of Vision 2030, by Prince Mohammad bin Salman bin Abdulaziz Al-Saud, Deputy Crown Prince and Chairman of the Council of Economic and Development Affairs, the solar energy industry can now stop speaking in speculative terms. That potential is now well defined and backed by the country’s visionary leaders. The future is now.

The Vision 2030 document reveals a well-thought-out strategy that takes into consideration Saudi Arabia’s strengths and its capabilities. The focus on specific sectors, including renewables, is deliberate and evidently backed by a solid socio-economic rationale.

I have no doubt that there are far more qualified experts who can comment on the various sectors included in the document and I will focus my analysis on the two paragraphs that succinctly summarize Saudi Arabia’s emphasis on developing its new renewable energy market.

By reviewing the legal and regulatory framework with a view to facilitate private sector investment in renewable energy, Saudi Arabia effectively signals that it is open for business

Ahmed S. Nada

First and foremost, the upcoming launch of the King Salman Renewable Energy Initiative and an “initial” renewable energy target of 9.5 gigawatts (GW) made headlines for obvious reasons. What differentiates this from previous initiatives announced by the country, is that Vision 2030 is the highest level commitment to renewable energy ever seen from the Kingdom.

The “initial” target suggests that the country will grow its renewable energy capacity in increments, taking advantage of future cost declines and efficiency improvements, while also leaving the door open for emerging technologies.

The second point that stood out was the country’s commitment to “guarantee the competitiveness of renewable energy through the gradual liberalization of the fuel market.” This, in my opinion, is clear evidence that the government fully intends to deliver on its renewable energy goals.

Liberalizing the fuel market

Subsidies for conventional fuels tend to hinder the adoption of renewables in many net energy exporting countries, for the simple reason that renewables simply cannot compete on an uneven playing field where subsidized oil is fueling domestic power generation.

By liberalizing the fuel market, Saudi Arabia will effectively grant renewable energy technologies, such as thin film photovoltaic (PV) solar, a level playing field on which to successfully compete against conventional generation as they currently do in other markets.

The document also spells out Saudi Arabia’s ambitions to becoming a renewable energy power house, citing research and development, and manufacturing as elements of the value chain that the country would look to invest in.

Vision 2030 accurately points out that the country has “all the raw ingredients for success” and this cannot be disputed. In fact, with the Balance of Systems – all the components of a PV power plant excluding the module – accounting for roughly a quarter of the cost of a solar power plant, the Kingdom is already well placed to leverage its existing local manufacturing base for the steel, cables and even other components, such as inverters, that are needed to build a utility-scale solar energy program.

The final aspect that needs to be highlighted is the emphasis on public-private partnerships. By reviewing the legal and regulatory framework with a view to facilitate private sector investment in renewable energy, Saudi Arabia effectively signals that it is open for business.

While more details are forthcoming, with the launch of the King Salman Renewable Energy Initiative, my hope is that Saudi Arabia will take a consultative approach on its renewable energy policy framework by leaning on capable, credible industry partners to share their expertise. This will allow the country to skirt the steep learning curve that other markets have had to endure.

Speaking on First Solar’s behalf, I would welcome the opportunity to share our views and over 13GW of global experience with Saudi Arabia, a country that we’ve maintained a longstanding commitment to.
Ahmed S. Nada is the Vice President and Region Executive for First Solar in the Middle East. With over 13GW of installed capacity, First Solar is a leading global provider of solar energy solutions.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.