Saudi Arabia and Japanese financial bank SoftBank have agreed an MoU through which they undertake to spend about $200 billion by 2030 to build 200 GW of solar PV, a move that would radically alter the global solar landscape.
The unprecedented project will vastly increase Saudi Arabia’s renewable energy capacity, which remains small despite the country’s large supply of sunshine Its largest solar farms to date are between one and two GW.
Crown Prince Mohammad bin Salman signed the agreement with SoftBank’s chief executive Masayoshi Son. It forms part of Saudi Arabia’s Vision 2030, intended to diversify the economy away from its traditional reliance on oil.
The Kingdom announced earlier this year plans to tender for 4 GW of renewable power this year, a mixture of solar and wind farms. The UK and Saudi Arabia signed a clean energy agreement in February to help share knowledge and expertise to accelerate the low-carbon economy.
“It’s a huge step in human history,” Prince Mohammed said of the new deal. “It’s bold, risky and we hope we succeed doing that.”
While the current agreement is only an MoU, Mr Son commented that the first phase of the project will amount to 7.2 GW and cost $5 billion. “The kingdom has great sunshine, great size of available land and great engineers, great labour, but most importantly, the best and greatest vision”, he said, according to the Reuters news agency.
According to data from Bloomberg, the 200 GW project would triple Saud Arabia’s entire electricity capacity, meaning it would become a net exporter of renewable power.
Not everyone is fully convinced by the announcement. It has been pointed out that the MoU contains few concrete details on how the partners will secure the amount of debt required, and did not mention the challenges involved in scaling up logistics and manufacturing capacity in a country that had less than 50 MW of solar PV installed as of last year, or how this tripling of the country’s total capacity would be integrated into the power grid and tariff structures.