Saudi Arabia will form a company to buy power from generators of renewable energy and to cover any cost difference between the purchase and sale prices, according to an official who has a hand in shaping the policy.
The Kingdom will present a national policy statement on renewable and nuclear power generation this year as it seeks to diversify energy resources, said Khalid Al Sulaiman, vice president at the King Abdullah City for Atomic and Renewable Energy (KA-CARE).
“There will be an offtaker and the offtaker will sell to a distribution company,” Al Sulaiman told reporters at a conference in Abu Dhabi Tuesday. “That offtaker will have to pay the difference between the cost of the electricity and the price the distributor pays.”
Saudi Arabia plans to attract about $109 billion in solar investments to generate a third of its electricity by 2032, or about 41,000 megawatts. It currently has about 3 megawatts of solar installations, trailing Egypt, Morocco, Tunisia, Algeria and the UAE, according to Bloomberg New Energy Finance.
KA-CARE is charged with reducing the Kingdom’s reliance on burning crude or fuel oil for electricity generation. That would also benefit the environment cutting carbon emissions while also saving oil for export, Al Sulaiman said.
Saudi policy makers will also consider the value of cutting emissions and the opportunity cost of burning valuable crude at home, he added. That would encourage officials to “monetize” the benefits of renewable energy, he said.
Currently, the State-owned Saudi Electricity Co. (SECO) is the country’s current electricity distributor, meaning it buys power from generators and sells it to residents. A so-called offtaker would buy power from renewable generators before selling it to the distributor.
Moreover, Al Sulaiman said Saudi Arabia has joined membership of the International Renewable Energy Agency (IRENA) and it coincided with the convening of the IRENA general assembly meetings in Abu Dhabi on Jan.13-14, 2013.
The IRENA is a non-governmental agency established in 2009 in Germany with the purpose of endorsing and encouraging extensive usage of renewable and sustainable energy of various types.
Al-Sulaiman said the Kingdom has established the King Abdullah Atomic and Renewable Energy City in order to introduce sources of renewable and sustainable energy into the local energy market.
Saudi Arabia intends to build a vital economic sector so as to magnify socio-economic development by developing renewable energy sources.