Solar Power Comes to Saudi Arabia in a Big Way as Peak Oil Looms

Saudi solar

Saudi Arabia is the world's largest exporter of oil. But as experts and WikiLeaks previously detailed—the country's oil supply may be fast dwindling and that has made renewable energy options, such as solar, that much more appealing. Just this week the country announced that construction of its largest solar power plant will be completed by September—and this just days after WikiLeaks reports about exaggerated oil quantities from the country hit the news.

"The solar market in the Gulf region is still in its infancy," said Klaus Friedl, general manager of Phoenix Solar, the firm contracted to build the new solar plant. "There is, however, a huge potential for solar power plants in Saudi Arabia."

The concern over oil shortages is no longer limited to supplying foreign countries—the rate of domestic consumption in Saudi Arabia is set to triple in the next 20 years to 120 gigawatts, which means that Saudis could foreseeably consume all of their oil just for themselves. "It's really a preservation decision using solar for domestic consumption and keeping your oil for more lucrative export markets," said Vahid Fotuhi, Middle East director of BP Solar. "Right now, out of the 8 million barrels per day they produce, over 3 million barrels per day are consumed domestically, mainly for power generation. That figure is growing 8 percent per annum," said Fotuhi.

Saudi Oil Minister Ali al-Naimi has already made it clear that he wants his country's level of solar output to match oil exports, though in terms of action the world is still left waiting. The country has more sun than oil, which means the desert nation could become the world's top exporter of power, just as it is the leader in oil.

Local engineers are supportive of the idea. "Saudi Arabia is the world's largest oil exporter and it has to become the leading exporter of solar energy," said engineering student Ammar Madani. "Oil has good yields and the cost of production is low, but it is not a renewable source of energy."

But solar also has its challenges—sand that covers solar panels can get in the way of energy generation and the cost of infrastructure could be prohibitive.

"Solar may cover part of the needs but not all of them depending on subsidies. The main factor will be cost," said Abdullah al-Shehri, governor of Saudi Arabia's Electricity and Co-generation Regulatory Authority.

With the recent WikiLeaks revelation that oil quantities in Saudi Arabia have been grossly exaggerated and the earlier revelation by the International Energy Agency that peak oil had in fact already passed in 2006, it's no wonder that Saudi Arabia is feeling a pinch. Whether solar or another renewable source will win the future remains to be seen—so far nuclear is in the lead.

Follow Fast Company on Twitter.

Add New Comment

0 Comments