Leading Saudi Arabia’s renewable energy revolution

As the global population grows and urbanization continues, governments around the world are transforming their thinking on how best to meet their future energy needs.

According to the United Nations, the global population will reach 8.5 billion by 2030 – up 1.2 billion from 2015.  This figure is predicted to increase to 9.7 billion by 2050[1].  At the same time, more people are living in urban areas.  The United Nations Department of Economic and Social Affairs predicts that the proportion of urban population will increase to around 66 percent by 2050, up from 30 percent in 1950.  In Saudi Arabia, the figure is dramatically higher, at just under 90 percent by 2050[2].

This high rate of population growth and urbanization inevitably poses big questions for the sustainability of our societies and the ability of our planet to support to such vast numbers of people living in close quarters.  In particular, it creates unprecedented pressures on energy demand and supply.

Energy demand in the Middle East, North Africa and Turkey (MENAT) region is set to grow 7 percent annually until at least 2020, while the Oxford Institute of Energy Studies expects energy consumption in Saudi Arabia to treble by 2030.

Not only is this growth unsustainable in terms of resources, it is generally accepted that emissions from fossil fuels like coal, oil and gas are material contributors to climate change and damaging to our natural environment.

Water security – an added complication

In the MENAT region, the problems are further complicated by the issue of water scarcity.  More than half of the region’s population live under conditions of ‘water stress’, where demand outstrips supply[3]. 

Saudi Arabia’s Vision 2030 recognizes the importance of water scarcity, committing the country to promoting “the optimal use of our water resources by reducing consumption and utilizing treated and renewable water”.

Historically, one of the key solutions to water scarcity has been desalination – facilities that turn sea water into drinking water.  However, the current approach to desalination is not sustainable.  It is energy intensive, relies on abundant oil, and comes at enormous environmental cost.  Desalination plants worldwide emit an estimated 76 million tons of carbon dioxide per year, a figure that is expected to treble by 2040.

Renewables the answer?

Against this backdrop, Saudi Arabia is increasing its focus on renewable energy as a cornerstone in building the solution to the current unsustainable energy model.  It is not hard to see why: Saudi’s climate makes it an ideal location for both solar and wind energy projects, and this opens significant investment opportunities in the energy sector to power domestic economic and technology-skills development.

The Government set a target of delivering 9.5GW of renewable energy by 2030, as part of its Vision 2030[4] and 3.5GW by 2020 as a strategic objective of the National Transformation Plan[5] agenda, and is encouraging private sector investment to accelerate and underpin the achievement of this goal.  The potential savings are significant, with research suggesting that fulfilment of these targets could cut power sector fossil fuel consumption by 25 percent by 2030[6].

Saudi Energy Minister HE Khalid Al Falih, speaking at the recent World Future Energy summit in Abu Dhabi in January 2017, raised the bar even higher, bringing forward the 9.5GW target date to 2023, via a combination of solar, wind and geothermal power projects.

The Government formally fired the starting gun on these plans last month, inviting bids for a new program to build wind and solar power plants aimed at generating 700MW of power.

Reduced costs, cleaner air, more jobs

As well as the potential to attract significant investment into Saudi Arabia, renewable energy could provide GCC countries with savings of up to US$ 87 billion and cut up to one gigaton of carbon emissions[7].

The expansion of the renewables sector should also have a positive impact on jobs, skills and training in the country.  The number of jobs supported by the global renewable energy industry is set to triple by 2030, with a potential for up to 80,000 of those in Saudi Arabia alone[8].

Omar Al-Madhi, Senior Managing Director at Abdul Latif Jameel Investments and Chief Executive Officer at Abdul Latif Jameel Energy Saudi Arabia, one of Saudi Arabia and the GCC’s leading renewable energy producers, believes the benefits of renewable energy are ever more compelling.  “Renewable energy presents the potential to create new jobs, new skills and new opportunities for the local population.  By localizing technology and transferring knowledge, we can provide a strong foundation on which the Saudi renewables industry can thrive,” he says.

Delivering sustainable desalination

Renewable energy could also be a major step towards developing sustainable desalination plants to help address the challenges of water security, by co-locating renewable energy power plants alongside desalination plants.

Although new technologies are making desalination more efficient, they are still at the early stages of development.  Renewable technologies such as solar thermal, solar photovoltaics (PV), wind, and geothermal energy, however, can provide a much more immediate solution.

What are the best renewable energy opportunities for Saudi Arabia?

With its climate and topography, the three renewable energy technologies with the most potential to transform energy production in Saudi Arabia are:

• Solar: With its sunny climate and vast stretches of flat land, Saudi Arabia is an ideal location for solar power plants.  It possesses one of the highest solar irradiation locations on Earth and it already has much of the expertise and infrastructure to connect solar power into the grid.  As the technology behind solar panels develops and becomes more suitable to Saudi Arabia’s environment, the country’s potential is undoubtedly enormous.

• Wind: The country’s wind energy potential is often underappreciated, but no less powerful.  Three Saudi regions are particularly suitable for wind energy, which becomes economically viable at average wind speeds of six meters per second.  In the country’s northeast and central regions, as well as those near mountains in the west, average wind speeds are around eight meters per second.

• Geothermal: Saudi Arabia is home to at least 10 hot springs suitable for geothermal power generation. They are mainly found in the country’s western region.  Al Khouba hot spring is considered the country’s most important potential geothermal resource.

Global experience to power Saudi Arabia’s renewable future

In response to this changing landscape of energy challenges and opportunities, Abdul Latif Jameel, one of the country’s leading diversified mutilnationals, established Abdul Latif Jameel Energy in 2012, to support the Saudi Government in achieving its vision for a more sustainable future meeting the country’s energy needs.

Through its solar and wind energy developer, FRV, which it acquired in 2015, Riyadh-based Abdul Latif Jameel Energy has gained over ten years of proven international capability in renewables from developing to mature renewables markets.  It has a 4.8GW development portfolio in solar markets across the Middle East, Australia, Africa, and Latin America – enough to supply electricity to approximately 2.2 million homes and remove more than six million tons of CO₂ emissions.

As the Saudi Government’s plans for renewables start to come to fruition, Abdul Latif Jameel Energy is ideally positioned to transfer its renewable energy experience to its home market, upskilling the population and taking advantage of the hard-won expertise it has gained through developing renewable energy projects across the world to offer a significant ‘fast-start’ in delivering the country’s vision.

Omar Al-Madhi said: “As an organisation, Abdul Latif Jameel Energy is in an advantageous position.  We have the international know-how for solar and wind development because we have developed projects outside Saudi Arabia, extending as far as Uruguay in the west and Australia in the east.  That allows us to use our experience to benchmark against best practices that are applied in different markets.

“What also truly differentiates us against other developers is that we’re a truly Saudi-centric organisation; Saudi Arabia is our home, this is where we began, and this is where we have built a reputation for operational excellence and outstanding customer service.  When you combine our international experience, technical know-how and the values of Abdul Latif Jameel, you have a great formula for success.”

Capitalising on its expertise in solar and wind power, in January 2017, Abdul Latif Jameel Energy announced the establishment of Almar Water Solutions.  This leading-edge water developer and services provider specialises in water infrastructure development, addressing the water security needs of growing populations through a sustainable program of desalination, water and waste water treatment, and recycling and reuse initiatives.

Almar Water Solutions has already begun to explore co-located development of renewable power generation and reverse osmosis desalination to minimize the carbon footprint of the desalination process.

Experience where it matters

Abdul Latif Jameel Energy’s expertise in the renewable energy sector is demonstrated by many landmark projects around the world.

Through FRV, it developed Uruguay’s first large-scale solar power plant, La Jacinta.  A key part of the Uruguayan government’s policy to promote solar power, La Jacinta is one of the largest solar PV projects in Latin America.  It supplies 64MW of power to the state-owned electricity company and its impact is considerable.  Approximately 35,000 Uruguayan homes are now powered entirely by the solar energy harnessed at La Jacinta, while almost 75,000 tons of annual CO₂ emissions have been eliminated.

The company is also supporting Jordan’s program of renewable energy expansion, fully developing two 65MW solar PV power plants in Mafraq and co-developing a third.  The first plant, which is due to start operations in 2017, will represent one percent of Jordan’s overall generation capacity and power more than 40,000 homes in the country.  The carbon emissions it eliminates will be equivalent to removing approximately 17,000 cars from Jordan’s roads.

In Australia, another landmark FRV project is Moree Solar Farm in New South Wales, which comprises 223,000 tracking solar PV modules and generates enough energy to supply roughly 24,000 homes.  The project also provides a further example of the technological innovation that Abdul Latif Jameel Energy can bring to Saudi Arabia, with Moree Solar Farm being the first large-scale Australian solar project to use a single-axis tracking system.  This system guarantees maximum efficiency in solar energy production by ensuring the PV modules follow the sun’s path from east to west as the day progresses.

Abdul Latif Jameel Energy’s track record for innovation is not confined to solar energy.   Almar Water Solutions has pre-qualified for a number of major water projects across the MENAT region, including flagship projects at King Abdullah Economic City (KAEC) in Saudi Arabia and with the Federal Electricity and Water Authority (FEWA) in the United Arab Emirates.

Making it work in MENAT

By leveraging the potential knowledge transfer available from Abdul Latif Jameel Energy’s experiences around the world, Saudi Arabia can cement a strong position in an ever-changing energy sector and continue to make strides in its bid to meet the ambitions laid out in Vision 2030.

The company has built-up a globally-proven skillset from both mature and developing renewable energy markets.  Now, it is ideally placed to bring the best knowledge and experience from around the world to help drive the growth and development of Saudi Arabia’s renewable energy sector.

Omar Al-Madhi says: “What excites me most about the current renewable energy situation in Saudi Arabia, is that we have the opportunity to participate in the development of a significant new area of sustainability for our country.”

“We firmly believe Saudi Arabia can be a reliable and significant energy supplier to the World in the renewable energy era, just like it has been a reliable global supplier in the hydrocarbon era.”

“We have the fundamental requirements for achieving a leadership role, whether that’s location, an abundance of land, or irradiation numbers. By taking the best of proven technology and expertise from renewables projects across the globe, and combining them with vision, innovation and commitment, the renewable energy sector could be a platform for a more sustainable, more efficient and more secure future for Saudi Arabia.”

Renewable energy: what are the options?

Solar power – Solar panels turn energy from the sun’s rays into energy.  There are two main types: solar thermal and photovoltaic (PV).  Solar thermal panels use the sun’s energy to heat water.  PV panels turn the sun’s energy directly into electricity.

Wind power – Generated by using the flow of air through wind turbines to mechanically power generators that create electric power, wind power is clean, uses little land and creates no greenhouse gas emissions.

Geothermal power – By using the heat energy stored in the Earth, geothermal power can be generated with only five percent of the greenhouse gas emissions of traditional coal-fired plants.

[1] World Population Prospects: 2015 Revision, Department of Economic and Social Affairs, United Nations.

[2] World Urbanization Prospects: 2014 Revision, Department of Economic and Social Affairs, United Nations.

[3] High and Dry: Climate Change, Water and the Economy, World Bank, May 2016.

[4] Saudi Arabia Vision 2030

[5] Saudi Arabia National Transformation Plan

[6] Renewable Energy Market Analysis: The GCC Region, International Renewable Energy Agency, 2016.

[7] Clean Energy in the GCC, Orient Planet Research, 2017.

[8] Renewable Energy Market Analysis: The GCC Region, International Renewable Energy Agency, 2016.