Saudi battles excess heat, dust to build solar power

www.reuters.com
23 May 2012

Saudi Arabia, the world's top oil exporter, may finally be getting serious about overcoming the technical and financial hurdles for tapping its other main resource: sunshine. Thousands of solar power panels have sprung up across Europe over the past few years, thanks to generous subsidies that make the technology an attractive alternative to conventional energy. Saudi Arabia too, wants to generate much more solar power as it lacks coal or enough natural gas output to meet rapidly rising power demand.

Doing so would allow it to slash the volume of oil it burns in power plants bankrolled by billions of dollars worth of saved oil earnings. "At world market prices, solar is competitive if you use crude oil to generate electricity", said Maher al-Odan, a senior consultant at King Abdullah City for Atomic and Renewable Research (KA-CARE) which was set up to plan Saudi Arabia's energy mix. Saudi Arabia has said it wants to become a major solar producer before, but its investments amount to much less than 50 MWs versus several countries which have added thousands of MWs a year.

This month, KA-CARE set forth a much more ambitious plan, recommending that the kingdom aim to get more than a third of its peak-load power supply, or about 41 GWs (GW), from the sun within two decades at an estimated cost well over $100 billion. Making the plan work economically rests on three assumptions: that technology improvements will cut costs, that a domestic solar industry will emerge and create jobs for a booming population, and that many billions of dollars worth of exportable oil will be saved.

An average of 700,000 barrels a day of crude were used in Saudi power stations during the peak air-conditioning demand period from May to September last year, according to official data supplied to the Joint Organisations Data Initiative (JODI). Although a rise in gas production should temper crude burning this summer, it will likely rise substantially in years ahead unless alternatives are found, and fast. "Domestic oil consumption is rising very rapidly and you get far more value for oil if it's exported than if it's consumed domestically", said Paul Gamble, chief economist at Jadwa Research in Riyadh.

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