Could Saudi Arabia Become the Next Solar Market Hotspot?

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Oil’s more than likely the first thing that pops into your mind when Saudi Arabia is mentioned. Sunlight might follow close behind, though, and for good reason. Located within the equatorial “Sun Belt,” where more solar radiation hits the earth than any other part of the globe, best available measurements are that Saudi Arabia receives an average (kWh) of solar energy per square meter of land area every day. That’s an abundant amount of freely available solar energy just waiting to be harnessed. Crafting policies that would stimulate adoption of solar energy systems and development of a solar energy economic value chain could also make significant contributions to critical social and environmental challenges the country faces.

Besides receiving a lot of solar energy, the ‘Desert Kingdom’ has other competitive advantages when it comes to the potential to develop solar energy markets and technology. For one, there’s lots of open land. Secondly, it has lots of sand, which contains a high percentage of silicon, the starting material for silicon solar photovoltaic (PV) cells and panels, as well as semiconductor chips. Thirdly, it has a fast-growing, relatively young and educated population, many of whom are looking for good private sector jobs and careers.

The Resource Curse; the Deep Roots of Oil

Being so rich and intensively invested in petroleum and natural gas, Saudi Arabia, along with other Gulf Cooperation Council (GCC) countries, have been resisting and even trying to turn back the renewable, clean energy tide. The latest statistics show that accounted for between 80%-90% of Saudi government budget revenue, 45% of national GDP and 90% of total export earnings. for 2011 are expected to be about $324 billion, according to the IMF.

Saudi Arabia holds an estimated , though some Saudi oil industry experts question government estimates of proven reserves, asserting that the country has already reached or gone past the point of peak oil production.

In a dramatic change in position, at least given its status quo-oriented, conservatively authoritative nature, the International Energy Agency (IEA), in its 2010 World Energy Outlook, acknowledged that global . With to more than double by 2030, Saudi and GCC leaders appear to be reconsidering their positions on solar and renewable energy, and are directing at least some capital investment into the sector.

Saudi Arabia burns more oil to generate electricity than any of its GCC neighbors. The executive director of Saudi Aramco Power Systems, Ziyad Al Shiha, last May told the press that Saudi Arabia was in turbines and that consumption was growing fast.

Peak Oil, Environmental Degradation

Just as Peak Oil appears upon us, or at least on the horizon and approaching fast, a number of other factors have prompted Saudi and GCC leaders to give some serious consideration to renewable energy, even if mostly in the context of its potential to reduce demand for fossil fuels and its own revenues.

One such impetus is environmental degradation- of air, land and water resources, which is high in a region critically lacking in water and food security. All are threats to the health and welfare of the region’s residents, as well as to their economies. Flat or declining crude oil production, as well as the escalating costs of finding and extracting new and existing reserves, poses another challenge.

An aggressive government-led program of renewable energy and clean tech investment would address these issues. Solar, wind, geothermal and marine energy plants are much less environmentally damaging than fossil fuel plants. Solar and wind power can be incorporated into plants, an energy-intensive process that Saudi Arabia already relies on extensively to meet its freshwater needs. Moreover, peak electricity demand occurs during summer daytime hours in Saudi Arabia, just when solar energy production peaks.

Key Challenges: Employment and

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