Saudi Arabia And The Quest For Solar Power

The modern Saudi Kingdom was built on black gold. The Arabian nation ranks second in the world in petroleum reserves and second in crude oil production, accounting for 13 percent of global supply. But although the Saudi economy is firmly rooted to the earth, the future may be in the sky. Without abandoning its dominant position in the oil industry, the Kingdom is poised to emerge as a hub of another energy source -- solar power. In 2010, now-deceased King Abdullah bin Abdulaziz established the King Abdullah City for Atomic and Renewable Energy, with the goal of "developing a substantial alternative energy capacity fully supported by world-class local industries." In 2012, the Kingdom set an official target for solar deployment of 40 gigawatts, which would make it by far the largest solar player in the region by 2040. However, Saudi Arabia has only been able to deploy 50 megawatts to date and is set to fall significantly short of its near-term goal of 7 gigawatts by 2016. Yet despite the sluggish pickup, those within the sector remain energized and optimistic. We spoke with Browning Rockwell, Executive Director of the Saudi Arabia Solar Industry Association, about the Kingdom's progress so far and its hopes for solar energy. The Government and the Market According to Rockwell, the government in Saudi Arabia is partially responsible for the slow takeoff. He says that the Kingdom's failure to institute a clear regulatory framework surrounding solar energy is hindering market interest. As of yet, "there's no clear policy or program that defines what the government is going to do or what it's going to allow the private sector to do." Since the private sector has been loath to get involved without such structure, according to Rockwell, the government has directed the majority of existing projects. But Rockwell describes these ventures as "isolated...trophy projects that only make a difference on the margins." He says the tiring trend of half-hearted public-sector commitment and private-sector non-participation has led to a phenomenon of "solar fatigue" within Saudi Arabia. Furthermore, Rockwell says that some projects that may have seemed grand when they first launched are actually rather insignificant in present terms. "100 megawatt projects aren't a big deal anymore." He summed up the problem like this: "The development of the market hasn't kept up with the message that's been given to media [by public officials] of how big the market was going to be." A Place for the Regime Saudi Arabia Solar Industry Association Executive Director Browning Rockwell offered some thoughts as to how the Saudi government might cultivate a market environment in which the solar industry could grow more rapidly. In his opinion, the government should should initially be involved in "establishing some deep projects" and regulatory policy, but beyond that should take a relatively hands-off approach. "They shouldn't be a partner in every job." And according to Rockwell, private Saudi energy companies have proven that they can operate successfully at a multinational level without direction from public officials. ACWA Power, an electricity and desalinated water provider, employs 2,300 people and operates large-scale in Morocco, Egypt, Jordan and other Arab countries. Diverse Motivations Yet although the path to a strong, independent solar energy market may still be murky, the rewards at the end of the road are much clearer. For one, large-scale alternative energy production would reduce Saudi Arabia's dependence on petroleum. The Saudis burn about a quarter of the oil they produce, and domestic consumption has been ballooning at about 7 percent per year. Population growth is also accelerating: in 1960, the capital city of Riyadh was home to about 150,000 people; now it has over 5 million. The Atlantic's Jeffrey Ball warns that the Kingdom's heavy dependence on oil may be unsustainable under these conditions. But according to Rockwell, solar energy could be "the black gold of the future." Historically, "the gulf has provided fertile ground for many new technologies to develop" in the petroleum space. He believes that it could serve a similar role for solar power as the field continues to mature. "Solar [technology] isn't just going to stay a framed square panel. It's going to go in a lot of different directions." And Saudi Arabia could lead it in those directions. Furthermore, Rockwell believes that the nascent solar sector and the traditional oil industry can help prop each other up; a portion of revenue generated from the export of crude could be reinvested into solar, which would help develop the market and by extension bolster the domestic economy. Specifically, solar technology could provide a new economic horizon for the Kingdom's growing younger demographic (some two-thirds of Saudis are under the age of 30). Rockwell says that solar companies "will give young, talented Saudis an opportunity to work." He says that they are excited about the new clean energy frontier. "They have been educated around the world and understand the need to be green. While small, off-grid Saudi solar projects have been in the works for years now, Rockwell believes that "the days of large scale are just beginning." He hopes that the focus within Saudi Arabia will shift from long-term goals to short-term implementable strategy. "You have to think about this in 3-5 year frameworks not 30-year frameworks."