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In an interesting conversation with SolarQuarter Middle East magazine, Francois Ganneau – Managing Director, Safeer spoke about his organization’s role and contribution to the RE sector. He also gave insights on market dynamics, growth potential and the company’s future contribution plans to the RE sector.
Could you please brief us about the organizations you are associated with and their role in the RE sector?
Safeer is a joint venture between TotalEnergies and Altaaqa Alternative Solutions, part of the Saudi-Arabian Zahid Group. Both groups have been cooperating for over 15 years and created Safeer as a joint venture in 2021.
TotalEnergies is a global multi-energy company. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
As part of its ambition to get to net-zero by 2050, TotalEnergies is building a portfolio of activities in renewables and electricity. TotalEnergies will continue to expand this business to reach 35 GW of gross production capacity from renewable sources and storage by 2025, and then 100 GW by 2030 with the objective of being among the world’s top 5 producers of electricity from wind and solar energy.
As for Zahid Group, the company was founded in 1943 and today is a multi-national organization with over 5.000 employees, operating across twelve industry sectors. One of its main sectors is its Energy Division, which works closely with renowned global partners to promote and accelerate the deployment of renewable energy solutions both on a national and international level. Its numerous subsidiaries, partnerships, and joint ventures cover different segments of solar power generation as well as wind and green hydrogen.
Through its various activities, Zahid Group plays an active part in the implementation of Saudi Arabia’s Green Initiative and National Renewable Energy Program and is committed to supporting the development of reliable, sustainable energy solutions worldwide.
What is your holistic view of the market dynamics of the solar business in the Middle East region?
The solar market outlook in the Middle East & in particular in GCC countries is very promising. Generally speaking, the region has become a hotbed of low solar tariffs over the last few years. The main drivers are the abundance of sunlight in the region, availability of land, and low-interest rates, while regulations are generally well supported by governments to transition towards renewables and reduce the reliance on fossil fuel.
More specifically on the C&I (Commercial & Industrial) market, the implementation and deployment of advanced regulations such as net-metering systems would enhance the deployment of Solar PV installation in the region.
In addition, increasing awareness and leadership on ESG and sustainability goals, along with potential carbon credits would also drive further the adoption of solar, and renewables.
Being a Commercial & Industrial Solar developer, how do you see the growth of this segment in the Saudi Arabia market? What are the potential and opportunities?
Solar energy has made exceptional progress in the Kingdom of Saudi Arabia with the government’s support of utility-scale renewable programs and targets. We believe that the C&I segment has the potential to be the largest and fastest-growing sector in the region if the policies are adequately adjusted.
The interest in solar PV from commercial & industrial users has been growing over the recent years in Saudi Arabia. Several projects have already been installed and are being operated. The Water and Electricity Regulatory Authority launched the first regulatory framework for Small-Scale Solar PV Systems from 1KW to 2MW for grid-connected PV systems in 2020.
As this regulation matures, the market would prove to be the highest growth potential, with lots of opportunities and interests from users.
With everything going well for solar projects in the Middle East, where do you see challenges for the sector in Saudi Arabia?
There are several challenges facing the C&I market in Saudi Arabia.
First, though the current regulation is an important step forward, there are still many constraints, creating a gap with the international best practices. This gap currently limits the size and execution of projects, and therefore the overall developments.
Secondly, the C&I electricity prices in KSA, actually especially the industrial tariff, are seen as quite low and subsidized. Solar can then have a hard time competing in some cases.
Thirdly, the client’s maturities are fairly uneven. While well-established companies understand the lease/PPA models, others are still not familiar with its benefits.
Finally, massive investments will be needed over the next years, which is exactly the role of solar developers, collaborating with an entire eco-system of installers, Operation and Maintenance experts, consultants, etc.
How do you see your company contributing to the clean energy sector in the region in the next couple of years?
Our goal is to deliver cost-effective, reliable solar energy solutions to the private sector across the Kingdom of Saudi Arabia and the Kingdom of Bahrain. We firmly believe that a key enabler to fast-track the implementation of the private solar energy sector is bringing access to strong financing and technical capabilities, which in turn allows the Commercial and Industrial sector to invest in their core business while ensuring the long-term reliability and safety of solar system operations.
By bringing these benefits to the private sector, we play an active role in realizing the Visions 2030, increasing the share of renewables in both Kingdom’s energy mix, while establishing socioeconomic benefits including job creation, promoting local manufacturing, driving corporate social responsibility, and educating future generations.
The fact that clean energy is decentralized, consumed where it is produced also limits the area needed to generate power and lowers the need for larger network infrastructure.
From those perspectives, the contribution is extremely meaningful; we are delighted and proud to be part of this journey.
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