Saudi Arabia commissioned no solar projects last year

Analytics company Globaldata has reported Saudi Arabia made no progress towards its ambitious renewable energy targets last year, as a result of a desire to tap ever cheaper solar power prices.

The London-based data company said the kingdom had failed to commission any of the 1,040 MW of solar expected last year under its National Renewable Energy Program.

Globaldata on Thursday cited the example of a 1,090 MW engineering, procurement and construction (EPC) contract in Saudi Arabia which Indian company Sterling and Wilson removed from its order book because of delays caused by an attempted renegotiation between the Saudi authorities and the project developer.

Speculating that the EPC contract related to the 2 GW Sudair solar project, Globaldata said the commissioning authority had attempted to restate the price of solar power to be generated by the giga-scale project in the light of new record low solar tariffs witnessed elsewhere in the region during 2020. With the Middle East vying with Portugal to set a new low price for solar power, the UAE’s Emirates Water and Electricity Co in July awarded the 1.5 GW Al Dhafra solar project in Abu Dhabi to EDF and Jinko Power for AED0.0497/kWh ($0.0135).

The delay resulting from haggling over the electricity price forced Sterling and Wilson to remove the EPC contract from its order book according to Globaldata, which cited an update by the company to the Bombay Stock Exchange.

The data company stated Saudi Arabia is pursuing a twin track approach to solar. The energy ministry’s Renewable Energy Program Development Office is holding competitive tenders for 30% of the PV capacity called for by the the kingdom’s clean energy ambitions and the balance is  being awarded directly by the government’s Private Investment Fund (PIF) to project developers. Globaldata claimed the desire of the PIF to keep pace with the ever lower prices produced by tenders was a stumbling block to getting projects on the ground.

pv magazine has contacted Sterling and Wilson and the Saudi energy ministry for more details.

Globaldata reports Saudi Arabia raised its renewable energy ambition for 2023 from 9.5 GW of generation capacity to 27.3 GW, with solar supplying the lion’s share – up from 5.9 GW to 20 GW – as part of an ambition to hit 58.7 GW of renewables this decade. That figure would equate to 12-14% of the Saudi energy supply in 2030, according to Globaldata.