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Saudi Arabia

Saudi Arabia

Question of the Week: Will a Saudi renewables exit damage the wind industry?

SAUDI ARABIA: A reshuffle in the Saudi Arabia government has cast doubt over its planned 9GW of wind projects. Windpower Monthly asks what losing the planned capacity would mean for the industry.

Capital city Riyadh - Saudi Arabia consumes around one third of its oil production to keep the lights on
Capital city Riyadh - Saudi Arabia consumes around one third of its oil production to keep the lights on

What does doubt over Saudi Arabia 9GW plans mean for the industry?

Steve Sawyer, CEO, Global Wind Energy Council (GWEC)

At GWEC, we had prioritized keeping track of the potentially very exciting developments in Saudi Arabia simply because the resource is large and the potential demand is very large.

However, we always knew that KACare was in a politically precarious situation; that it was to a large degree dependent upon the good graces of the King; and that there were strong forces arrayed against it.

Now with the King's passing, it appears that the opposition has seized the upper hand, at least for the moment.

I would imagine that the interest in the story was as much about the insights it provides into the mysterious power struggles in the ruling family of the world's largest oil producing country. We all know that the regime is unstable to some degree, and that its collapse would have dramatic consequences for global oil supply and the global economy.

However, the fact that Saudi Arabia is already consuming something like one third of its oil production to keep the lights on and feed its extraordinary power demand growth means that sooner or later they will wake up to the fact that in order to preserve any possibility of long term economic viability, they need to stop burning their most precious resource for power, and utilize the tremendous wind and solar potential in the country. When they do, we will be ready.

Oliver Foester, co-chair of the Renewables and CleanTech Business Initiative, Globalaw

Two weeks ago, when the Kingdom of Saudi-Arabia announced to disband the Supreme Council of the King Abdullah Centre for Atomic and Renewable Energy (KACare), word was spread amongst the wind energy industry faster than a desert storm and some market participants wiped their eyes.

Others however, felt that the world's most ambitious renewable energy plan of the Kingdom of Saudi Arabia became an unattainable mirage.

However, entry by the wind industry to the new and expected multi-billion dollar untouched market, with sheer unlimited (petro-dollar) funds, seems to be in danger of being blown away as vigorously as it had been introduced in 2012.

If the reshuffling of KACare will become a herald of a downsizing of Saudi Arabia's renewable energy program, the multi-national players who are the only likely bidders may set their sights to other markets - given the size of the Saudi Arabia's plans and the new market environment.

However, the reshaping of KACare also creates an opportunity for the Middle East to create a market of
global importance.

The region can build a regionally leading wind power industry on a down-to-earth basis in terms of capacities and time frames. It can also diversify the energy mix.

Finally it can offer capacity to meet the demand of the fast growing domestic energy sector through renewable energy sources rather than oil-fired power stations. This requires a strategy that is robust and built on a more solid foundation than a sand dune.

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