Browning Rockwell, founder and executive director of the Saudi Arabia Solar Industry Association (SASIA) & Solar GCC Alliance, discusses the prospects for solar in the kingdom.
What is your outlook for the solar industry in Saudi Arabia and the wider region?
I applaud solar headline numbers from utility scale development but this market is project oriented and not focused on developing a solar market and reducing energy subsidies over time. Utility scale solar does not influence consumer behavior or energy conservation the way that distributed generation (DG) does. Until energy policy is changed to encourage the development of distributed generation there will be little private sector organised solar development. Do not expect any significant private sector initiated solar development in the next two years.
It is important that expectations are managed properly for those national and international companies that expect to benefit from b2b distributed solar development, which currently is not possible due to the energy subsidies in many countries. Saudi Arabia, Bahrain, UAE and Oman will need to raise electricity prices or provide an incentive for residential & commercial/industrial solar programs to develop.
Saudi Arabia and other GCC countries have a clear choice: compare the gain of cheap imported solar against the loss of not creating a sustainable, private-sector domestic solar industry. The current path will result in no significant manufacturing, with utility-scale deals taken by large quasi-state actors, and smaller-scale rooftops & commercial projects will slowly emerge in the private sector as energy subsidies are reduced.
How will Saudi Arabia finance its planned $50bn investment in solar projects?
The Saudi government is not making the investment. They have set targets that they hope to achieve via public tenders with private sector investment. Between the recently announced $500bn Neom City with 100% renewable and the pending IPO of Aramco, there is plenty of opportunity to be had in the region. Neom will be floated on financial markets alongside oil giant Saudi Aramco as part of the kingdom’s drive to diversify away from oil.
What’s next for solar in the GCC?
State sponsored solar electricity companies are on the horizon in the GCC solar sector. Siraj Power, the solar energy company for electricity generation in Qatar, will start production by April 30, 2020. This model is being duplicated in other GCC markets as governments launch ESCOs and continue to be the majority development/investment partner for solar project development in the region. However this model continues the government control of the power sector which comes at the expense of private sector development of distributed solar projects.
What is the next big trend in solar technology?
While there are developments in the works to reduce Concentrated Solar Power (CPS) costs with molten salt storage, battery storage costs will decline at a rapid rate. CSP plants still cost a lot more than PV plants. Unlike lithium-ion batteries, which are expected to see significant cost reductions, molten salt is not expected to achieve any costs reductions. Molten salt prices are driven by the fertilizer industry and not the growth of CSP market.
Browning Rockwell is the founder and executive director of the Saudi Arabia Solar Industry Association (SASIA) & Solar GCC Alliance. He will appear on a panel at the Global Solar Leaders' Summit (GSLS) during The Big 5 in Dubai later this month to discuss the latest developments and trends in the solar industry in Saudi Arabia.