Saudi Arabia is making a big push for renewable energy to cut their oil dependence.

As the world’s number one exporter of crude oil, renewable energy is probably the last thing that comes to mind when thinking of Saudi Arabia. Nevertheless, it is now turning to solar and wind power in a SGD 71 billion (USD 50 billion) bid to cut dependency on oil amid growing energy demands domestically.

The country’s energy minister released a statement via e-mail on Monday, announcing that companies should submit documents by March 20 to bid for their part in a push for 700MW of renewable power, and that the winning bids would be selected by April 10. The energy companies that qualify will then be able to present their proposals for new power plants through July.

“This marks the starting point of a long and sustained program of renewable energy deployment in Saudi Arabia that will not only diversify our power mix but also catalyze economic development,” said Khalid Al-Falih, the energy minister, in the statement. The ministry’s renewable energy office is hoping to establish “the most attractive, competitive and well executed government renewable energy investment programs in the world,” he said.

The words ‘solar farm’ and ‘desert’ seem like natural bedfellows

Middle Eastern countries like Saudi Arabia, the United Arab Emirates, Jordan and Morocco are all pushing for renewable energy in order to either curb fuel imports or prevent the use of oil which could otherwise be sold. The effort makes sense, even purely from an energy perspective, there are few places more geographically suited for extensive solar farms, for example. Saudi Arabia has stated that they’re planning to develop as much as 10 GW of renewable energy by 2023, something which will require investments between SGD 43bn – 71bn (USD 30bn to 50bn).

In this first stage of development, the bidders are competing for the construction of two plants; a 300-megawatt solar facility at Sakaka in the country’s northern Al Jouf province and a 400-megawatt wind plant at Midyan in northwestern Tabuk province.

source: Bloomberg