Saudi Arabia and SoftBank signed a MOU to build a $200 billion solar power project this week in New York, dwarfing all other existing or planned projects in the world and placing the Kingdom and its 3,000 hours of sunshine a year into a global leadership position in the renewable energy field.
The project, unveiled in New York this week at a ceremony with Saudi Crown Prince Mohammed Bin Salman and Masayoshi Son, chairman and chief executive officer of SoftBank Group, is significant in its size and ambition and could be a crucial for the success of Vision 2030. The bet on solar power is one of the most direct ways for Saudi Arabia to achieve success with its economic and social reform plans because it will free up more of the nation’s oil to be sold for export purposes. According to Reuters, Saudi Arabia burned an average of 700,000 bpd of oil for electricity to keep the population cool in the hottest months from May to August last year.
The project is significantly larger than any other project, and although it is now only in the MOU stage, shows Saudi Arabia’s commitment to renewable energy sources. As Bloomberg reports, at 200 gigawatts, the Softbank project planned for the Saudi desert “would be about 100 times larger than the next biggest proposed development and more than double what the global photovoltaic industry supplied last year,” the publication said, adding that if built, the development would “almost triple Saudi Arabia’s electricity generation capacity, which stood at 77 gigawatts in 2016.”
Two-hundred gigawatts is four times the solar capacity in the United States and four times China’s annual pace of solar power expansion, and as of the end of 2016, the world as a whole had installed only 303 gigawatts of total solar photovoltaic capacity, according to the Washington Post.
The project will also create jobs and further the development of localized industry in Saudi Arabia, where energy jobs are primarily in oil and natural gas. Son said that Saudi Arabia was perfect for such an ambitious project because “the Kingdom has great sunshine, great size of available land and great engineers, great neighbors, but most importantly, the best and greatest vision.”
Crown Prince Mohammed called it “a huge step in human history.”
“It’s bold, risky and we hope we succeed doing that,” Prince Mohammed said.
But according to the Washington Post, industry analysts interviewed about the plan expressed skepticism about the larger 200GW blueprint but curiosity about the smaller-scale first steps to achieve it, for which details were more concrete.
“If even part of that were to be built, it would drastically shift the trajectory of the solar market in Saudi Arabia,” Benjamin Attia, an analyst for GTM Research, told the Post.