Power sector in 2030

Saudi Arabia increased its renewable energy capacity rapidly over the past decade reaching 440 MW in 2021, most of which (330MW) was installed in 2021 alone.⁸ Despite this growth, the share of renewable energy in the power mix was 0.5% in 2019.¹⁴ As per the National Renewable Energy Program under the Vision 2030 strategy, Saudi Arabia aims to install 27 GW and 59 GW of renewable energy capacity by 2023 and 2030, respectively.¹⁰ In 2021, Saudi Arabia announced signed deals to construct seven utility-scale solar plants of 3.7 GW combined capacity.¹² While these are steps in the right direction, more needs to be done to be consistent with a 1.5°C compatible pathway.

While the power mix today is close to 100% reliant on fossil fuels, the share of fossil fuels would need to decline to 0–5% by 2040 and 0% by 2050. Some models show a phasing out of oil by 2030 and others a reduction from 46% in 2017 to 0–20% by 2050.²² Renewable energy can reach up to a 29% share by 2030. A higher penetration of renewable energy sources leads to lower levels of fossil fuels and avoids the need to rely on currently costly, unproven carbon capture and storage technologies. The Saudi government has announced that it will cease electricity generation from oil from 2030 onward, but the policies to implement this target are still lacking.¹⁰

Towards a fully decarbonised power sector

To align with a 1.5°C compatible pathway, Saudi Arabia will need to fully decarbonise its electricity supply around 2040s. Gas power plants will need to be phased out between 2040 and 2047 and renewable energy sources, essentially negligible in 2019, need to dominate the country’s power mix with an 86–94% share by 2040 and 92–100% by mid-century.

1.5°C compatible pathways further show that the power sector will need to reduce its carbon intensity from 620 gCO₂/kWh in 2019 by as much as half by 2030. With a certain amount of carbon dioxide removal technology deployment, in this case bioenergy carbon capture and storage (BECCS), the sector’s carbon intensity goes down to -80 gCO₂/kWh by 2050. A delay in phasing out fossil fuels from the power mix would require Saudi Arabia to rely more heavily on negative emissions technologies, which would mean higher investment needs.

The government’s focus on CCS development, a technology not currently available at scale, requires massive investments and is inherently risky. A failure for CCS technologies to achieve commercial viability would make Saudi Arabia’s mitigation burden bigger, and raise the risk of stranded assets.

¹ Kingdom of Saudi Arabia. Updated First Nationally Determined Contribution 2021 Submission to UNFCCC. (2021).

² Climate Action Tracker. Climate Action Tracker. Climate Action Tracker (2022).

³ BBC News. Saudi Arabia commits to net zero emissions by 2060. (2021).

⁴ International Energy Agency. Energy data and statistics. (2021).

⁵ Alnatheer, O. The potential contribution of renewable energy to electricity supply in Saudi Arabia. Energy Policy 33, 2298–2312 (2005).

⁶ BP. Statistical Review of World Energy 2021. (2021).

⁷ KPMG. Kingdom of Saudi Arabia Budget Report A review of the Saudi Arabia 2020 budget and recent economic developments (2019).

⁸ IRENA. Renewable Energy Statistics 2021. (2021).

⁹ General Authority for Statistics. Indicators of Renewable Energy in Saudi Arabia 2018. (2018).

¹⁰ Recharge News. We will be pioneering’: Saudi Arabia reveals 50% renewables goal by 2030, but is that realistic? (2021).

¹¹ Climate Action Tracker. Country Analysis: Saudi Arabia September 2020 Update. (2020).

¹² Balkan Green Energy News. Saudi Arabia to add 3.7 GW in solar power, achieves world’s lowest price. (2021).

¹³ Government of Saudi Arabia. The Intended Nationally Determined Contribution of the Kingdom of Saudi Arabia under the UNFCCC. (2015).

¹⁴ Climate Transparency. Climate Transparency Report 2022 | Climate Transparency. (2022).

¹⁵ Bloomberg Green. Saudi Arabia to use 110 billion gas project for blue hydrogen. (2021).

¹⁶ TNO. 15 things you need to know about hydrogen. (2021).

¹⁷ Climate Transparency. Country Profile: Saudi Arabia. (2021).

¹⁸ Utilities Middle East. Saudi Arabia gets first EV charging stations. (2019).

¹⁹ Rose, M. Saudi Arabia to launch partial operation of Riyadh Metro by September 2021. Urban Transport News (2021).

²⁰ In some of the analysed pathways, the energy sector assumes already a certain amount of carbon dioxide removal technologies, in this case bioenergy carbon capture and storage (BECCS).

²¹ While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.

²² The Low CDR Reliance (AIM/CGE SSP-1) scenario shows an oil share of 21% in power mix in 2050 after peaking in 2030. Low Energy Demand scenario (MESSAGEix-GLOBIOM) project the oil share to be 1.7% in 2050. Rest of the scenarios project oil to be phased out from the Saudi power mix by 2050.