Saudi Arabia has announced that in partnership with Japanese investment bank Softbank, the kingdom will build the world’s largest hi-tech solar plant project. The latest technology in the world of solar panels has led to huge improvements in their efficiency over the past decade or so. Significant government subsidies stimulated demand and generated the cash flow required for solar technology R&D to reach the point of approximate grid parity with the cost of producing electricity from traditional fossil fuels.
However, despite technology improvements, solar power can only ever be really competitive in consistently sunny regions. And there is nowhere in the world that is sunnier than the desert kingdoms of the Arabian peninsula.
The project, which will see $200 billion invested by 2030, will consist of a ‘series of solar parks’ throughout Saudi Arabia. Final generation capacity is expected to be 200 gigawatts, which would be enough to power 150 million homes. With a total population of a little over 30 million, it can be presumed that Saudi Arabia expects to sell some of the generated electricity to neighbours. The future needs of the planned new ‘smart’ mega city NEOM, Crown Prince Mohammed bin Salman is planning on the shores of the Red Sea may also be integral to the scale of the project.
Under the leadership of bin Salman, Saudi Arabia is embarking upon a series of hugely ambitious projects designed to wean the kingdom’s economy off its reliance on oil. It’s the world’s largest exporter and also holds the largest easy access reserves.
Both Prince Mohammed and Softbank chief exec. Masayoshi Son spoke ebulliently about the partnership and project it will fund at Tuesday’s New York press briefing. The Prince called the project “a huge step in human history” and Mr Son stated “you have never seen something of this scale”.
It is projected that the solar parks will save Saudi Arabia $40 billion a year in electricity generation expenses and create 100,000 new jobs. A first $5 billion phase of the project will start this year with completion in 2019 and be expected to have a generation capacity of 7.2 gigawatts of power. SoftBank is playing a key role in the kingdom’s transition from an economy wholly dependent on oil into a private sector-fuelled tech-focused modern economy. A domestic industry around solar power technology and the manufacture of photovoltaic panels is expected to spring up around the colossal project.
Power storage technology R&D is also planned and a key component to how quickly global energy infrastructure will transition to renewable sources.