Interview: Turki al-Shehri, head of Saudi renewables body

27 August 2017

The government is confident about delivering 9.5GW of alternative energy

When Saudi Arabia launched its ambitious Vision 2030 economic reform programme in 2016, those interested in the kingdom’s energy sector were drawn to one provision in particular: a target for 9.5GW of renewable energy.

While there was no further elaboration on the timeline for the target, or how it was to be achieved, the largest capacity goal for renewable energy in the region renewed optimism for the potential of the sector in Saudi Arabia. Six years earlier, Riyadh had announced a target of 54GW of renewable energy by 2032. While the programme was established to great fanfare, it became apparent that not only was the 54GW target unobtainable, but that Saudi Arabia needed to introduce a much more robust structure to deliver clean energy on a large scale.

Since the launch of the 9.5GW target, action has been swift. The Renewable Energy Project Development Office (Repdo) was established this year under the Ministry of Energy, Industry & Mineral Resources to oversee the development of the kingdom’s National Renewable Energy Programme, and has already issued tender documents for the first planned project – a 300MW photovoltaic (PV) solar scheme at Sakaka, in the northwest of the country. The renewables body has also invited developers to express interest in a planned 400MW wind farm at Dumat al-Jandal.

The man in charge of the ambitious programme is Turki al-Shehri, head of the newly established Repdo. In an exclusive interview with MEED, Al-Shehri said the interest shown in the programme so far conveys the significant opportunities the kingdom’s alternative energy sector can offer regional and international energy firms and investors.

“So far, we have seen excellent participation – we had 600 expressions of interest when we first made the announcement and companies from 48 countries wanted to participate in the initial round,” says Al-Shehri. “We expect to see more for future rounds. Saudi Arabia has a large land mass, a growing population and a lot of potential for renewable energy.”

Firm foundation

While much criticism was levelled at the King Abdullah City for Atomic & Renewable Energy (KA-Care), the body established in 2010 to oversee the initial programme, for failing to proceed with any projects, Al-Shehri says the work undertaken previously has been vital to facilitate the current progress. “We have capitalised on what was done in the past,” he says. “KA-Care set out plans and had the know-how for pre-development of some of the sites and put out resource stations to take readings and help select sites.

“[Saudi] Aramco is also a big player [in renewables] and SEC [Saudi Electricity Company] has played a big role, and now that they will all fall under the energy ministry and Repdo, we can build on what was done before. It would have been impossible to put out projects that require two or three years’ pre-development work, resource assessment and environmental impact assessment. The only way for that to happen is to use the work these organisations did in the past, and we continue to work with them today.”

With a target having been set to develop the 9.5GW by 2023, Repdo is aware it needs to make timely progress with the initial two schemes and begin tendering for the next projects as soon as possible.

“The next round will be 1.02GW, which will include 620MW of solar and 400MW of wind,” says Al-Shehri. “Hopefully, we will see this rolled out between the fourth quarter of this year and the first quarter of 2018.”

The Repdo head says there will be opportunities for numerous companies to participate in the ambitious programme. “For the next round, the wind project will be one site, but the solar capacity will be on more than one site. So it may come out in a few tenders, because 620MW is fairly large, and we want to give opportunities for smaller companies to participate, so it will be broken down into more than one project.”

According to Al-Shehri, a new prequalification process will be opened for each scheme to allow maximum opportunities for developers. “We will also be opening up opportunities for other consultants to submit tenders on each round [of projects],” he says.

Concentrated solar

While the initial schemes focus on PV solar and wind, the kingdom is planning to implement concentrated solar power (CSP) and other technologies in future rounds.

“CSP and geothermal are both planned for future projects,” says Al-Shehri. “Whether geothermal will be part of the 9.5GW is more difficult, but CSP will definitely be part of it.

“CSP requires different types of pre-development; we are working on that now, and hope to announce in the near future when the tender will be out for these projects.”

The advantage of CSP is that it enables the storage of energy, which can be used to feed electricity into the grid at off-peak periods. The recent submission of a sub-10 $cents a kilowatt hour bid for Dubai’s first CSP scheme has further increased the attractiveness of the technology. Al-Shehri says Repdo is keen to learn and benefit from its GCC neighbours in pushing ahead with renewable energy on a large scale.

“Dubai has done a great job,” he says. “We don’t see it as competition, it helps each country to get competitive prices and push the renewables agenda. All of the countries in the region will add value moving forward.”

A central pillar of Saudi Arabia’s Vision 2030 is diversifying the economy and increasing opportunities for local jobs and businesses. Al-Shehri says localisation forms a critical component of the region’s largest renewable energy programme.

“While we expect very competitive prices, we are not just looking for the cheapest solar projects. We are looking for value,” he says.

“And what I mean by value is local content. For the first project, we have identified 30 per cent [local content] as the minimum, but we are looking to increase this as more tenders come [through].”

“We are already seeing that large global players seeking to participate are starting to work with the local market and work with smaller companies. The message is clear – we are trying to create an industry, and not just a subsidised industry, but a competitive industry, so that the companies created can compete and [meet] demand, not just in the kingdom but also for the region, and hopefully export renewable energy products in the future.”

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.