To hear the oil ministers of Saudi Arabia and Kuwait talk about it this week, the race to develop massive solar power arrays in the world’s sunniest nations is nearly as important as the current battle for oil market share.
At a major conference in Vienna attended by the world’s most influential oil officials and executives, the two OPEC powerhouses took time to hail their nascent solar power efforts.
“If we are ever successful in harnessing that energy I can assure you that Saudi Arabia will have a distinct relative advantage: acreage and the sun every day,” Saudi oil minister Ali al-Naimi said on Wednesday.
“Instead of exporting fossil fuel by 2040 – and before even that – (we could be) exporting gigawatts of electricity – how does that sound?”
Several years ago the kingdom set out an ambitious effort to build a 41-gigawatt (GW) solar power sector within two decades, expanding its capacity from next to nothing to nearly a third of the nation’s electricity system. Earlier this year it pushed that target back to 2040, having made little progress.
Kuwait has announced plans to generate 15% of its energy needs via renewable sources by 2030, with the first of up to 100 solar-powered fuelling stations operating by 2017, oil minister Ali Saleh al-Omair said.
A pilot 70-megawatt project in the Shagaya desert zone west of Kuwait City was expected to be completed by next year, with more ambitious phases to follow in future years.
While prospects of becoming a solar exporting powerhouse may be decades away, big Gulf producers have more pressing reasons to invest in the industry: rapid growth in domestic demand that is increasingly being met by inefficient and costly fuel.
During the peak summer season, Saudi Arabia burns nearly a tenth of its own crude production to generate power due to a lack of gas- or renewable-fuelled power plants. Fossil fuel demand could more than double to 8.3 million b/d by 2028 if left unchecked, according to government estimates.
Kuwait consumes more power per capita than all but three other countries, and nearly twice as much as neighbouring Saudi Arabia, according to 2011 data from the World Bank.
Efforts may now be accelerating, however. In April, Saudi-based conglomerate Abdul Latif Jameel bought large solar developer Fotowatio Renewable Ventures.
Others are also taking note. The United Arab Emirates could save $1.9 billion a year by 2030 by using renewable sources to generate a tenth of its energy needs, according to a report released in April.
On Wednesday, German industrial company Siemens agreed to a $9 billion power deal with Egypt that includes 12 wind farms with an installed capacity of 2 GW.
The recent discussions of solar power also come at a pivotal moment for the world’s response to climate change, with big oil producers expected to face growing pressure to reduce emissions in the run-up to United Nations talks in Paris later this year.
The Saudi vision is one “I would encourage all OPEC members to take seriously,” Royal Dutch Shell CEO Ben van Beurden said at the same event.
“Not least because I believe 20 years from now, if we don’t act, global public opinion will be unforgiving.”