Saudi Arabia's Vision 2030 Has Sparked a Massive Renewable Energy Push
- Saudi Arabia aims to generate 50% of its electricity from renewables by 2030 and reach net-zero emissions by 2060.
- Major projects like NEOM and multibillion-dollar solar and wind tenders are driving green energy growth.
- Digital transformation and investment in AI are strengthening Saudi Arabia’s non-oil economy and attracting global investors.
Saudi Arabia’s Vision 2030 national development strategy establishes the aim of economic diversification, as the government seeks to reduce its reliance on fossil fuel revenues by expanding other economic sectors. In addition to drawing revenue from growing industries, such as construction, ICT, and tourism, the government is encouraging greater energy diversification to boost the country’s long-term energy security.
Saudi Arabia built its wealth on oil, and it remains the second-biggest oil-producing country in the world, with an output of over 12 million bpd of crude. The Middle Eastern state has proven reserves of 266.5 billion barrels of oil, suggesting that it could continue pumping fossil fuels for decades to come. However, as part of its aim to reduce reliance on fossil fuel revenues, Saudi Arabia has been investing heavily in developing its other energy sectors in recent years.
The government of Saudi Arabia has been working with the United Nations Development Programme for around two decades, in a bid to develop a sustainable, long-term renewable energy strategy. It developed a $100-million National Energy Efficiency Programme and launched the Saudi Energy Efficiency Centre. The Kingdom aims to achieve 50 percent renewable electricity by 2030, or 130 GW of capacity, and reach net-zero carbon emissions by 2060.
The solar energy sector has expanded rapidly in recent years, following the launch of the first large-scale, grid-connected utility 300-MW solar PV project, Sakaka PV, in November 2019, developed by ACWA Power. Saudi Arabia now has 10.2 GW of renewable capacity connected to the grid, as well as more than 33 GW in various stages of development. It aims to tender an additional 20 GW of renewable energy annually through 2030 to reach its diversification targets.
To support its solar energy sector, Saudi Arabia is investing in the rollout of large-scale battery energy storage systems (BESS), with 8GWh (2GW) of capacity already operational. A further 22 GWh (5.5 GW) of BESS is currently under development, which will support the meeting of a national target for 48 GWh of storage capacity by 2030. Other sectors being developed include wind energy, geothermal power, and green hydrogen.
The government’s futuristic mega-project, the $9 trillion NEOM, will be a major driver of green energy deployment. The NEOM green hydrogen project is expected to become the largest utility-scale commercially based hydrogen facility powered by renewable energy in the world. The $8.4 billion project will include 3.9 GW of green power from solar, wind, and BESS and is expected to produce 600 tonnes per day of clean hydrogen once operational. The government aims to power the entire NEOM mega-project using a variety of renewable energies.
In October, the Saudi Power Procurement Company (SPPC) announced it had awarded five renewable energy projects with a total capacity of 4.5 GW, with a value of over $2.4 billion. The projects were awarded to the UAE renewable energy company Masdar and the French companies TotalEnergies and EDF, among others.
The projects include Masdar’s 1.4 GW Najran Solar Energy Project and 600 MW Ad Darb Solar Plant; Saudi Electricity Company and EDF’s 600 MW Samtah Solar Plant; Al Jomaih Energy and Water Company and TotalEnergies’ 400 MW Sufun Solar Plant, and the 1.5 GW Dawadmi Wind Energy Project in Riyadh province from Korea Electric Power Corporation, Nesma Renewable Energy Company and Ajman’s Etihad Water and Electricity Company.
The accelerated development of Saudi Arabia’s IT sector has also helped it to grow its non-oil industries through a greater openness to innovative technologies, such as artificial intelligence (AI). Saudi Arabia’s Vision 2030 promotes a strategy of digitalisation across all sectors, which has attracted the interest of investors worldwide. The Kingdom is expected to develop data centres “at a scale and at a competitive cost not achieved anywhere else,” according to the country’s Investment Minister Khalid Al Falih. “AI has emerged [in] the last three, four years, and it’s definitely going to define the future economy of every nation. Those who invest will lead, and those who lag behind, unfortunately, will lose,” stressed Al Falih.
Saudi Arabia has experienced unprecedented success with its economic diversification project over the last decade. Around 50.6 percent of the Saudi economy is now “completely decoupled” from oil, according to Al Falih. Meanwhile, in 2024, the Kingdom announced a 1.3 percent increase in annual GDP, driven by 4.3 percent growth in non-oil segments.
Saudi Arabia’s economic diversification strategy has gone from strength to strength in recent years, as the government has used the country’s sovereign wealth fund – the Public Investment Fund – to invest in a wide variety of industries to attract higher levels of private investment. The Kingdom has begun to develop its renewable energy sector, with green energy capacity expected to grow at an accelerated rate over the next decade. This will be supported by greater digitalisation and an openness to innovative technologies.
By Felicity Bradstock for Oilprice.com
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