- SoftBank of Japan has signed a MoU with Saudi Arabia to establish 200 GW of solar power capacity in the Middle Eastern nation by 2030
- Two solar power plants of 3 GW and 4.2 GW are planned to be launched by 2019
- A new company will be created to lead the massive project and production facilities for solar panels along with energy storage to be set up in Saudi Arabia
- The massive project is anticipated to create around 100,000 local jobs
- Feasibility studies are expected to be complete by May
Japanese tech giant SoftBank Group plans to set up the mother of all solar power projects, representing 200 GW of PV capacity by the year 2030 in Saudi Arabia. If realized, the Solar Power Project 2030 would undoubtedly be the largest of its kind in the world. As big as the announcement, as short it is on details. There was no information where exactly the project will be built or how it will be financed.
A 200 MW project would be nearly 4 times what China, the world’s leading PV market installed last year (53 GW) and nearly half of the total installed global PV capacity end of 2017 (400 GW). The world’s largest PV power plant today, the Tengger Desert Solar Park, reportedly has a capacity of 1.5 GW and is located in Zhonghwei, Ninxia province, China.
SoftBank Group Chairman and CEO Masayoshi Son signed a MoU about the project with Saudi Crown Prince Prince Mohammed bin Salman bin Abdulaziz in New York on March 28, 2018. The agreement entails creating a new company to lead the project. “Two solar plants with a capacity of 3 GW and 4.2 GW will be launched by 2019, and solar panels will be manufactured and developed in the Kingdom of Saudi Arabia, with a capacity of 150 GW and 200 GW by 2030,” reads an online statement by the Saudi Press Agency (SPA).
Production plans include manufacturing and development of solar storage systems. The products would be marketed globally as well. Through the MoU, the two partners want to explore possibilities of establishing industries in the field of power generation systems and batteries in the country. The project is expected to create around 100,000 local jobs.
Both parties want to complete feasibility studies for the project by May 2018.
An oil dependent economy, Saudi Arabia is trying to diversify its energy resources and save on oil demand while it strives to continue to maintain its leading position in the global oil markets. The country plans to tender 3.3 GW of PV capacity during the course of 2018, expecting close to $7 billion in investment (see Saudi Arabia To Tender 3.3 GW Of PV In 2018).
Bloomberg says the venture could cost $200 billion and help save $40 billion in power costs. Head of solar analysis at Bloomberg New Energy Finance (BNEF), Jenny Chase pointed out that many of these MoUs don’t result in anything happening.
In October 2017, Saudi Crown Prince had announced a massive project called Neom, a new city on the coast of the Red Sea that would be completely powered by solar and wind energy (see Clean Energy To Power Saudi Arabia’s New City). Back then, SoftBank Vision Fund (SBVF) signed a non-binding MoU with Saudi Electricity Company to develop 3 GW of solar power generation capacity in Saudi Arabia in 2018. The country’s Public Investment Fund (PIF) and SBVF are supposed to create solar energy and energy storage manufacturing facilities and associated employment in the country under New Solar Energy Plan 2030.
It is not clear if the 200 GW PV capacity will be set up in Neom or anywhere else in the country. Bloomberg says SoftBank could be spending up to $15 billion in Neom. The Japanese company is planning investments of around $10 billion in state owned utility Saudi Electricity Co.
The Renewable Energy Projects Development Office (REPDO) of Saudi Arabia recently announced local renewable energy power producer ACWA Power as the winner of 300 MW Sakaka solar power project in Al-Jouf region (see ACWA Power Wins 300 MW Saudi PV Tender). It rejected the lowest bid of $0.0179 per kWh offered by a partnership between Masdar from UAE and EDF from France to pick instead the next lowest bidder, local company ACWA Power, which finally won the project for $0.0234 per kWh.