Saudi Arabia Building 41,000 MW of Solar, Showing Gas Kills Not Renewables

In a phrase that may trouble William Penn, the defender of religious liberty, some call Pennsylvania the Saudi Arabia of gas.  Saudi Arabia, meanwhile, is becoming the Saudi Arabia of solar by building 41,000 megawatts of solar by 2032 to supply one-half of its electricity.  www.bloomberg.com/news/2012-05-10/saudi-arabia-plans-109-billion-boost-for-solar-power.html.

That amount of solar would equal the entire solar capacity in the world today.  The Saudi solar entry is a tipping point in the solar revolution and another strong indicator that gas is not killing renewable energy.

The Saudis will devote a total of $109 billion to its solar plans, with $82 billion for the capital costs of the solar facilities, and the remainder to build solar factories, train Saudis, and operate the solar facilities.  In another sign of how competitive solar has become, the per watt cost of the Saudi solar program is to average $2 per watt, even though 25,000 megawatts of the total will be solar thermal/concentrating solar power systems and 16,000 megawatts will be solar PV.

The Saudis will begin their solar program by seeking bids in the first quarter of 2013 to construct 1100 megawatts of solar PV and 900 megawatts of solar thermal.  An interim milestone is to have solar provide 10% of national electricity by 2020.

Why are the Saudis taking the solar plunge? Solar is simply becoming competitive in more places around the world. Solar prices have crashed at a rate similar to natural gas prices in the US, reaching a projected $2 per watt capital cost in the Saudi program.  With zero fuel cost and the lowest production costs of any power generation technology, such capital cost pricing makes solar attractive economically.

The Saudis also face a doubling of their electricity supply by 2020 and the prospect of seeing one-half of their oil production consumed by their electricity generation needs, unless they diversify how they make electricity.  The Saudis calculate that they get more economic value by selling oil on the international market than burning it to make electricity.

The Saudis also want their solar program to generate jobs and electricity and so will require the manufacturing of some solar equipment in the Kingdom.  They see no conflict between green jobs and oil and gas.

In fact, the Saudis view the growth of solar as helpful to maximizing their oil wealth, a reminder again that renewable energy  will continue to grow strongly around the world over the next 20 years.