Fahad Shadeed / REUTERS A Saudi man walks on a street past a field of solar panels at the King Abdulaziz city of Sciences and Technology, Al-Oyeynah Research Station, May 2012.

Saudi Arabia's Renewables Revolution

How Washington Can Guide the Process

U.S. President Donald Trump’s visit to Saudi Arabia last month cast attention on a kingdom in transition. The country is currently working to transform its vast oil wealth into a modern, sustainable economy fit for the twenty-first century. Central to this goal is a transformation of the Saudi energy sector, which the National Renewable Energy Program was recently established to help bring about. Saudi Energy Minister Khalid al-Falih recently announced that under NREP, Riyadh aims to deploy 9.5 gigawatts of renewable energy capacity by 2023 and attract $30 billion to $50 billion of investment in renewables by 2030.

Despite the fanfare these announcements have received, skepticism about their attainability is warranted. Saudi Arabia and the broader region face technical, institutional, and economic challenges in reaching such lofty renewable targets. Indeed, Riyadh initially floated even more ambitious goals, only to scale them back when crude prices fell dramatically below the $150 per barrel mark that planners were anticipating.

The motivations behind Saudi Arabia’s renewables revolution are clear. Wind and solar power are needed to displace power generation from oil and oil products. Saudis rely almost entirely on domestic crude oil, diesel, and natural gas for electricity. At current rates, domestic demand is projected to cut up to two million barrels a day from oil exports by 2020. Riyadh is already taking concrete steps in response. In February, Saudi Arabia solicited tenders for a 300 megawatt solar project and a 400 megawatt wind project representing NREP’s first phase. Falih stated this could be as transformative a development as when the kingdom first discovered oil in the 1930s. Yet even if Saudi Arabia achieves only part of its aims, Washington should find ways to guide Riyadh through these initiatives.

A POWER PLAYER

Clean energy contributes to Vision 2030, the Saudi national plan to curtail dependence on oil revenues through economic diversification, in two ways. First, it would incentivize Saudi Arabia to integrate its power grid more deeply with its neighbors’, which would allow it to export electricity throughout the region,

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