GREEN IDEAS

his year’s Green Economy chapter on Saudi Arabia looks at two major segments, water desalination and power generation, both from a financial feasibility perspective. The potential for alternative sources of energy and for increased efficiencies in the current system are well known already, yet the market has yet to mature enough for these technologies and systems to take off.

Industry leaders say the water management and desalination industry are back on track, and the growing need for desalination pushed the Saudi Water Partnership Company, formerly the Saudi Water and Electricity Company, in 1Q2019 to designate more than 10 plants that need to come online before 2025, along with seven sewage treatment plants and strategic tanks.

The structure of the current water-related projects requires financially strong consortium leaders, as well as EPC contractors and sub-contractors, which the government wants to focus on local efforts. In this sense, the market is bound to become more competitive. That increased competition could discourage smaller firms.

Privatization remains a hot topic in the sector, and privatization schemes will be based on longterm supply plans, especially after the council of ministers in mid-September 2019 approved a blueprint for the privatization of Saline Water Conversion Corporation (SWCC), the largest desalination firm in the world and second-largest electricity producer in the country.

As for the solar power industry, the government has taken serious initiatives, releasing the first

Tround solar project in Al Jouf. The government has set the goal of producing 25GW from solar by 2023. In 2019 alone, there will be a total capacity of 2.2GW. Nevertheless, the strategic plans and announcements in the last eight years have created a vast supply of suppliers of solar power system components that compete against each other, leaving the industry highly unregulated and immature.

For the solar power industry, there is a need to control the value chain, quality, and price through full integration of services to become competitive on an international scale. On the other hand, financial feasibility is still an issue, as solar energy is still more expensive than subsidized oil and gas. Storage is competing head to head with the ubiquity of diesel generators.

Both the public and private sector have realized that storage services play a vital role in stabilizing the outages and the grid to supply extra energy whenever there is an outage. In addition to storage, concepts such as “smart grids” that better manage power are still buzzwords. When asked about the delays in the advancement of the solar industry, players have often said that the government’s priority for technology remains boosting cybersecurity.

Overall, some progress has been made in transforming Saudi Arabia’s energy mix, but these efforts are still in their initial stages. A greener economy in Saudi Arabia will need to focus more on drawing energy from the sun, while water and electricity conservation efforts are just as important. ✖