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Saudi Arabia’s solar power potential will grow to just above 5.1GW between 2022-2031 due to the support of its long-term plans for the power sector.
The country’s National Renewable Energy Programme (NREP) established a state-driven auction tendering system for renewable power capacity. This system has been awarded contracts to over 1.7GW of solar energy projects. The kingdom also highlighted hydrogen as an important component of its long-term energy sector strategy. It aims to produce 2.9 million tonnes of hydrogen annually by 2030.
The study stated that although the strategy doesn’t set targets for green hydrogen production that large-scale green hydrogen projects are in the pipeline, it suggests that renewable hydrogen will make up a substantial portion of this production.
“As a result, we note upside risk to our solar power forecasts in the burgeoning green hydrogen industry, which will place upward pressure on renewable electricity supplies and drive further investment in solar power over the coming years.”
The agency is however cautious about the outlook for Saudi solar power growth, as the market has not met its ambitious goals in the past.
“With tangible growth in the solar power sector only appearing in the past two years, policy constraints on foreign private ownership in the industry, as well as the dominance of large incumbent state-owned utilities, will present hurdles to investors seeking to participate in the market.”
This largely desert country boasts some of the greatest solar power potentials in the globe, with high solar radiation rates, large amounts of suitable and available land, and strong forecasts for electricity demand growth over the next ten years.
The government’s recent friendliness towards renewables supports the focus on solar. It aims to reduce crude oil consumption and diversify its power sector, as well as increase its green hydrogen production.