Saudi Arabia’s Energy Strategy and Transition

Saudi Arabia, traditionally a dominant player in the global oil market, is progressively steering towards renewable energy to mitigate its carbon footprint and align with the global shift towards sustainability.

Current Energy Mix and Statistics

• Saudi Arabia’s cumulative installed power capacity was approximately 97.7 GW in 2022, with an expected growth rate indicating a robust development trajectory.
• Fossil fuels continue to dominate the energy mix, with oil constituting 62.2% and natural gas 37.7% of the primary energy consumption in 2022. The renewable sources, including solar and wind, accounted for a marginal share of the total.
• Despite the commitment to expanding the renewable sector, there has been slow progress in updating the electricity generation mix statistics, making it challenging to track advancements against net-zero commitments​​.

Here is a table that describes the generated electricity by source (we selected Solar, Renewable that includes Solar, and Fossil fuels):

Year	Electricity from solar – TWh	Electricity from renewables – TWh	Electricity from fossil fuels – TWh	Saudi Annual Generation – TWh
2000	0	0	138.68	138.68
2001	0	0	146.09	146.09
2002	0	0	154.91	154.91
2003	0	0	166.58	166.58
2004	0	0	173.41	173.41
2005	0	0	191.05	191.05
2006	0	0	196.31	196.31
2007	0	0	204.43	204.43
2008	0	0	204.2	204.2
2009	0	0	204.2	204.2
2010	0	0	248.77	248.77
2011	0.01	0.01	259	259.15
2012	0.03	0.03	282	281.63
2013	0.04	0.04	295	294.72
2014	0.05	0.05	328	328.2
2015	0.05	0.05	351	350.64
2016	0.05	0.05	358	357.66
2017	0.07	0.07	395	394.99
2018	0.16	0.16	375	374.77
2019	0.21	0.21	378	378.55
2020	0.21	0.21	381	380.9
2021	0.83	1	392	392.94
2022	0.83	1	401	401.59

The above tables show that less than 1% of electricity is generated from renewable energy. Saudi Arabia’s energy strategy aims to extract economic value from its hydrocarbon reserves while expanding renewable power. Vision 2030’s National Renewable Energy Programme (NREP) targets 50% domestic power from renewables by 2030.

Key Players in the Energy Sector are Saudi Aramco, which handles all oil and gas operations and supplies feedstock for power generation, and ACWA Power, which has significant PIF investment and operates across 12 countries, which is crucial in energy diversification and water security.

New laws are geared towards energy sector privatization and circular economy principles. Regulations enable consumers to install renewable energy systems up to 2 MW, with WERA approving over 106 contractors to build solar PV systems for household installations.

Renewable Energy Initiatives and Forecasts

• Saudi Arabia aims to achieve 50% of domestic power from renewable sources by 2030, with significant investments directed towards renewable power projects and infrastructure improvements, including the smart grid.
• Approximately 30 solar and wind projects are planned to be operational between 2023 and 2030, with a total investment of about $50 billion. These include 40 GW of PV solar, 16 GW of wind, and 2.7 GW of concentrated solar capacity​​. A list of some of those projects is here.
• Significant investments in solar projects, such as the $3.3 billion investment in three new solar projects by Badeel and ACWA Power.

Vision 2030 and the Saudi Green Initiative

Vision 2030 reflects a concerted effort towards a Net Zero future by 2060, with the Saudi Green Initiative (SGI) playing a pivotal role. This initiative is set to drive large-scale investments and innovations to scale up the Kingdom’s climate action. Targets under SGI include reducing carbon emissions significantly, planting billions of trees, and protecting a vast proportion of the country’s land and sea by 2030. Progress is marked by the connection of 700 MW of solar/wind energy to the grid, providing the capacity to power over 100,000 homes, among other notable achievements​​.

Sources:

1. https://powersaudiarabia.com.sa/
2. https://saudipedia.com/
3. https://ourworldindata.org/
4. https://iea.org/