Saudi Arabia’s renewable energy sector could create 750,000 jobs

Saudi Arabia’s renewable energy sector could create 750,000 jobs

25 Aug 2020

According to the latest report from the US-Saudi Arabian Business Council, Saudi Arabia's programme to develop renewable energy capacity and build up manufacturing capabilities could create 750,000 jobs by 2030

Saudi Arabia’s renewable energy sector could create up to 750,000 jobs over the next decade, according to the US-Saudi Arabian Business Council.

“The level of ongoing investment in the sector is expected to create up to 750,000 jobs over the next 10 years, assuming renewables remain a priority sector. Localising the manufacturing base will provide for most of the employment opportunities as the kingdom aims to localise the sector to 40 per cent to 45 per cent by 2028 and beyond,” said Albara’a al-Wazir, the business council’s chief economist, in a statement issued along with the latest report.

“In order to achieve its medium- to long-term renewable energy objectives, the kingdom must prioritise the sector within its budgetary planning and allow for continued foreign investment attraction,” said Al-Wazir.

The business council noted in it study that it expected 5.3GW of clean energy to be added to the grid by 2030, significantly lower than the 58.7GW clean energy target the government has previously set.

The report revealed that the Covid-19 pandemic was likely to delay progress with the current and upcoming rounds of the kingdom’s ambitious National Renewable Energy Programme (NREP), which is being developed by the Renewable Energy Project Development Office (Repdo), the clean energy arm of the Ministry of Energy, Industry and Mineral Resources.

“The negative effects of the pandemic on the renewable energy sector have caused delays in the selection of winning bids for round two of NREP’s auctions. The final selection for round two was expected to occur in April 2020 but was delayed,” the council said.

The report stated that the business council expects solar energy to account for 77 per cent of all the 5.3GW renewable energy capacity additions to the grid by 2030.

In January 2019, Riyadh ramped up its clean energy targets to 27.3GW by 2024 and 58.7GW by 2030, far superseding the previous 9.5GW by 2023 target.

Repdo will be overseeing the development of 30 per cent of this ambitious target through competitive tendering, the Public Investment Fund (PIF) is expected to appoint developers through direct negotiations for the remaining 70 per cent.

In addition to developing significant renewable energy capacity, Saudi Arabia is also planning to develop a comprehensive supply chain of manufacturing of PV panels and other components as part of localisation targets set out in its Vision 2030 masterplan.

Repdo received bids for the 1.6GW second round of its NREP on 20 January this year. Just prior to this, the renewables body had invited developers to prequalify for the third round, which will include four PV solar projects with a total capacity of 1.2GW.

Repdo shortlisted bidders for five of the six photovoltaic (PV) Category B solar projects tendered under the second round of the NREP on 3 April.

For the sixth and largest project tendered under the second round, the two lowest bidders submitted best and final offers on 18 April.

Later in April, Repdo issued tender documents to prequalified developers for the 1.2GW third round of the NREP, with bids due in November.

According to sources close to the kingdom’s renewables programme, the bidders are still waiting to hear from the client when contracts will be awarded and power purchase agreements (PPAs) signed.

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