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Middle East Is Exploring Renewable Energy In 2017
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Saudi Arabia’s long-awaited drive to free up more oil revenue by shifting to solar power generation is expected to pick up speed next quarter, according to local developers eyeing contracts.
“I’m fully expecting within the first quarter 500 megawatts to come out in tenders and then it’ll ramp up,” said Paddy Padmanathan, the chief executive officer of Acwa Power International in Riyadh. “That will be a game changer for the region.”
The world’s biggest crude exporter also burns more oil than any other country to generate electricity. According to the most recent International Energy Agency figures, the kingdom consumes at least 900,000 barrels a day at peak periods of the year to keep the lights on -- an amount worth over $16 billion a annually based on current oil spot prices. Integrating more solar power onto the Saudi grid could free up more crude for export.
Saudi Arabia plans to add another 700 megawatts from wind and solar power generation in 2018 according to people familiar with the plan, who said the kingdom forecasts another 8.8 gigawatts of renewable energy added to the grid between 2019 and 2023.
“We expect Saudi Arabia will be the largest market in the region in the medium to long-term,” said Sami Khoreibi, the founder and chief executive officer of Enviromena Power Systems, a solar developer based in Abu Dhabi. “You take a look at the opportunity cost of using crude oil for electricity production and you have a very high operating expense, and the power demand growth in Saudi Arabia is one of the largest in the region.”
Saudi Arabia’s on-again, off-again pursuit of solar energy has already shown signs of picking in the last six months as the kingdom struggled to patch budget holes and map future economic diversification.
Saudi Potential

Acwa Power and Fotowatio Renewables Ventures BV were both shortlisted for a 100-megawatt solar tender offered during the second half of 2016. The two 50-megawatt projects will be located in Al-Jouf and Rafha in northern part of the peninsula, according to the state utility.
“It is starting,” said Rafael Benjumea, CEO of Fotowatio, which is owned by Abdul Latif Jameel in Jeddah and won a bid in May to help build an 800-megawatt solar plant in Dubai.
“Of course it has taken very long but there’s a clear move to change their renewable energy mix,” he said. “There’s a lot of potential in the Saudi market.”
Saudi Arabia is seeking a financial adviser to help attract investors to three renewable power projects, which would be owned and operated by the private sector and could cost as much as $1.5 billion to build, according to people familiar with the plans.

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