Why Oil-Rich Gulf Arab Countries Are Turning To Renewables -- Bloomberg -- February 11, 2018: Bottom Line -- GE Needs To Move All Of Its Eggs Into The Mideast

Link here.

The other day I posted an update on Saudi Arabia's solar energy plans. For the past few days, it has made the top ten most popular posts (linked at the sidebar at the right) and today is the #1 most popular post at the blog.

Today, Bloomberg (same link as above) has a story on the same subject. Not much new, but corroborates what was posted earlier. Some data points from the linked article:

• solar energy will be used to run power plants instead of oil and natural gas
• Saudi will eventually run out of oil; it essentially has no natural gas
• electricity use in Gulf Arab nations has surged by 6% / year since 2000
• energy use driven by populations; energy-intensive industries, particularly desalination plants
• 20 gigawatts to require $30 billion of investment (look at EIA figures for US solar energy back in 2016)
• Saudi Arabia, goal: by 2020, 3.45 GW; by 2030, 9.5 GW, of wind/solar; about 10% of its generating capacity
• Saudi Arabia, estimated $30 billion to $50 billion over next six years for 3.45 GW -- if I'm reading the article correctly ($50 billion / 3.45 GW = $14 million / GW -- that number is so far outside the ballpark something sounds amiss -- but the math is correct; even if it's only $30 billion for 10 GW, that works out to $3 million / MW)
• UAE: $163 billion to diversity its supply
• then this:  if the kingdom doesn’t curb demand or invest in alternative energy sources, local needs could absorb most of its hydrocarbon production within 10 to 20 years

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US Costs

In the US, back in 2016, the EIA estimated costs for new electricity-producing plants:

• for natural gas: 7,411 MW installed in 2013 at an average cost of about $1,000/MW
• for wind: 859 MW installed at an average cost of about $2,000/MW (or double that of natural gas)
• for solar: 2,634 MW installed at an average cost of almost $4,000/MW (about about 4x that of natural gas)
• 1000 MW = 1 GW
• Arab investment: $30 billion / 20,000 MW  = $1.5 million / MW -- less than half what it was in the US back in 2016, but one must think that labor costs in Saudi Arabia must be half what they are in the US -- just a guess

From the article, for the archives:

Saudi Arabia: The world’s biggest oil exporter aims to build about 3.45 gigawatts of solar and wind plants by 2020. It wants to be able to produce 9.5 gigawatts, or some 10 percent of its generating capacity, from renewables by 2023.

The energy ministry targets an estimated $30 billion to $50 billion in renewables investment over the next six years.

United Arab Emirates: The U.A.E. plans for renewables to make up 44 percent of its energy mix by 2050, with gas, coal and nuclear contributing the rest. It’s earmarking 600 billion dirhams ($163 billion) in spending to diversify its supply. In March, the emirate of Dubai completed the second phase of what it expects will be the world’s largest solar park by 2030.

Kuwait: The Ministry of Electricity and Water foresees a tripling of domestic energy demand by 2030 and targets producing 15 percent of its electricity from solar and wind power by then.

Qatar: The biggest exporter of liquefied natural gas aims to get 1.8 gigawatts, or 16 percent, of its power generation from solar by 2020, rising to 10 gigawatts by 2030, BNEF reported in May. It currently has no utility-scale solar projects.

Bahrain: The smallest of the GCC countries needs to increase its generating capacity by 6 percent a year to keep pace with demand, according to the multilateral Arab Petroleum Investments Corp.

Bahrain aims for renewables to contribute 5 percent of its electricity by 2020, IRENA says.

Oman: Oman has several solar projects underway, including a program encouraging the use of rooftop solar panels. California-based GlassPoint Solar Inc. is building a 1-gigawatt solar-thermal facility to turn water into steam for injection into oil fields to enhance the recovery of crude.

And then this:

Saudi Arabia has received the world’s cheapest offer for supply of solar power. Electricite de France SA and Abu Dhabi’s Masdar made a joint bid to provide electricity from a 300-megawatt photovoltaic plant for as little as 1.79 cents a kilowatt hour, the Saudi energy ministry said in October.

If awarded, that would beat the previous record low of 2.42 cents a kilowatt-hour set in Abu Dhabi in March. The Abu Dhabi offer had in turn beaten Dubai’s record from May 2016 for solar power at 2.99 cents a kilowatt-hour.

These rates may not capture the full cost of supplies in the peak summer season, but they do reflect improvements in technology that are leading to better cost savings globally. Rivalries among Arab Gulf monarchies to secure the cheapest deals for solar power may also put pressure on providers to low-ball bids.

 But repeating, a data point that simply blows me away:

 If the kingdom doesn’t curb demand or invest in alternative energy sources, local needs could absorb most of its hydrocarbon production within 10 to 20 years.

Ten years is not all that long from now. As Yogi Berra would say, "That's only about ten years from now."