Saudi Arabia and Japan’s SoftBank create powerful solar-energy firm
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Saudi Arabia is ramping up its solar energy projects in partnership with Japanese firm SoftBank.
The projects are expected to ultimately produce up to 200 gigawatts (GW) by 2030, according to SoftBank chief executive Masayoshi Son.
This would add up to around 400GW of globally installed solar power capacity and is comparable to the world’s total nuclear power capacity of around 390 GW as of the end of 2016.
The agreement will start with the construction of Saudi Arabia’s first two solar-generation projects with 3GW and 4.2GW of solar capacity respectively.
By 2030, the plan commits the parties to manufacture and develop solar panels in Saudi Arabia for solar power generation, between 150GW and 200GW.
By investing in solar power, Saudi Arabia, the world’s biggest oil exporter, can reduce the amount of crude it currently uses to generate power and increase its overseas shipments.
The final investment total for the 200GW of generation, including the solar panels, battery storage and a manufacturing facility for panels in Saudi Arabia, will eventually total around $200bn, Son said.
The agreement also commits the parties to explore the manufacture and development of energy storage systems and establish joint ventures for research and development.
The initial phase of the project for 7.2GW of solar capacity will cost $5bn, with $1bn coming from SoftBank’s Vision Fund and the rest from project financing, he said.
Saudi Arabia’s Vision 2030 reform plan, which aims to reduce the country’s economic dependence on oil, was a good match for the fund’s long-term vision for innovation, said Son.
“These two visions have come together to create clean, sustainable, low-cost and productive renewable energy,” he said. “The Kingdom has great sunshine, great size of available land and great engineers.”
Despite being one of the world’s sunniest countries, Saudi Arabia generates most of its electricity from oil-fired power plants.
Saudi’s entire installed power capacity is currently around 60GW. Adding 200GW would create enormous excess capacity that could be exported to neighbours or used by industry, although the kingdom will still require other forms of power generation for night-time back-up.
The country began an official tender process for its first nuclear reactors last year, making it only the second Arab nation to turn to nuclear power.
Industry estimates say around 300,000 to 800,000 barrels per day of crude oil are burnt for Saudi power generation.
Exporting that oil could increase Saudi’s annual oil revenues by between $7bn and $20bn, at the current price for benchmark Brent oil of almost $70 per barrel.
In 2016, the single largest solar farm in the world was constructed in the Indian state of Tamil Nadu, taking the record from a facility in California.