Saudi Arabia and Energy Transition Towards Renewable Energy

In 2014, the historical oil price crash that lasted for 2 years initiated a series of economic crises across the Middle East. Saudi Arabia, being the powerhouse of oil has seen government revenues plummeting as a result of declining oil prices.

Under the leadership of Crown Prince Mohammad bin Salman; from 2016 to 2017, the Saudi government has began a national reform program known as “Vision 2030” to diversify the country’s economy away from oil, and to build a sustainable future from the investment of public sectors such as healthcare, education, and tourism.


Saudi Vision 2030: A dream come trueSources:


Part of the Vision 2030 projects also includes a $200 billion renewable energy project. This project has become the largest investment of renewable energy for the kingdom historically as oil production continues to grow over 1 million b/d for the last decade, even considering the effect of pandemics on the global oil industry.

For Saudi Arabia, the uneven distribution of oil resources across the kingdom exacerbates inequality and poverty issues from different regions. According to the Oil & Gas Journal (OGJ), although Saudi Arabia has about 130 major oil and natural gas fields, more than half of its oil reserves are located in the northeast part of the kingdom. The northern part of the kingdom traditionally belongs to the royal family, the super-rich and upper-middle-class reside while poor masses including undocumented migrant workers, the poor, and middle class are reserved in the southern region.

Unlike oil resources which divide the wealth of the kingdom, renewable energy has the possibility to create a sustainable economy by providing equal job opportunities to various regions for lower and middle-income families.

Saudi Arabia has the capacity to build a strong renewable energy grid to power its electricity needs. The desert in the southern front stretching from hundreds of square kilometers has the geological advantage for building mega-solar power plants.


In September 2020, Energy Minister of the kingdom, Abdul Aziz bin Salman announced Saudi Arabia is planning to produce 50 percent of electricity from renewable energy by 2030. In April this year, the government also signed power purchase agreements with seven new solar projects that will provide electricity for more than 600,000 households in the kingdom. It is estimated that this shift in electricity energy sources will be able to displace over 1 million b/d of oil liquids equivalent.

Renewable energy development in Saudi Arabia is only a small part of the large green energy revolution occurring in the Middle East. Recently, Qatar, UAE have also began to advance on clean energy agendas to drastically curb greenhouse gas emissions. The Middle East Energy Transition reports show there were no contract awards for oil-powered or fueled power stations in the Middle East and North Africa (MENA) region for the first half of 2021.

Renewable energy can play a bigger role in bringing  Saudi’s Vision 2030 into reality and providing a sustainable economic framework for the future of the Middle East.

Leave a Reply