Saudi Arabia: International partnerships crucial for solar PV market development

Riyadh – 3 October 2013. In a country where 16 GW of solar-photovoltaic capacity are set to be installed by 2032 – of which 6 GW are targeted for installation by 2020 – now is the time for local and international businesses to get involved in the Saudi Arabian PV market.

With as much as $109 billion allocated by the Saudi government for solar investments, and five to seven renewable energy projects to be tendered in the introductory tendering round, competition will be intense between bidders, who will have to undergo a scrupulous selection process.

Companies that can mark their presence early and establish solid partnerships are more likely to gain a slice of this massive market. For international PV players, Saudi Arabia boasts many large, well-financed firms that can manage utility-scale projects from a financial perspective, besides having the experience and know-how to execute projects in the country.

For Saudi businesses, on the other hand, whether specializing in renewable energy, conventional power plants, engineering and construction, project development, or operations and maintenance, partnering with international PV players would not only be advantageous, but vital to obtaining the technical expertise and knowledge needed for taking on large-scale PV projects.

As a matter of fact, building synergistic partnerships could make all the difference in securing funds and meeting the rigid criteria outlined in K.A.CARE’s Proposed Competitive Procurement Process (CPP) for the Renewable Energy Program – more commonly referred to as the White Paper.

For example, amongst the CPP’s key evaluation criteria are the bidder’s financial capability, development status, experience and local content usage. “In order to qualify proponents for the initial procurement rounds, the focus will be on financial capability and experience,” states KA.CARE’s White Paper.

“For the experience requirements, the proponent or at least three of its designated team members must have planned and developed, constructed, or operated at least one or more renewable generating facilities of similar size and technology to those being proposed, in order to qualify,” the document further highlights

Such requirements could be easily met through the establishment of strong partnerships and the pooling of assets and expertise. Indeed, several partnerships have already formed in Saudi Arabia’s solar arena.

Most recently for instance, Germany’s Phoenix Solar AG was contracted to develop a 3.5 MWp PV plant for Saudi Aramco, for which 12,684 panels from China’s Suntech were used as well as inverters from SMA Solar Technology AG. The ground-mounted PV system is now being extended to 5.3 MWp, also by Phoenix Solar, and will become the largest in Saudi Arabia when completed in the first half of 2014.

However, the German company, along with its Singapore subsidiary, partnered with local project developer Hi-Technology & Contracting Company to jointly implement the designing, procurement, construction and commissioning of the new 1.8 MWp PV plant, which will cover around 2.6 hectares of desert land.

This is a perfect example of how merging the experience of a reputable international PV developer with that of a well-established Saudi contractor resulted in the winning of a major contract.

Operating under desert conditions

Given the few megawatts of solar PV have been installed so far in Saudi Arabia, almost 1,000 MW will need to be installed every year in order to achieve the government’s 2020 target of 6 GW. Since 1,000 MW of PV equates to around 6 million m2, this means that roughly 4 million solar panels will be required per year, or more than 10,000 solar panels per day.

Land requirements, however, should not be a limitation, as vast amounts of space are available in the desert. Moreover, the country’s high solar irradiation, which ranges from 1,800 kWh/m2 up to 2,200 in some locations, can potentially maximize the power yields and operating efficiency of a PV plant.

The challenge lies in understanding how desert conditions in Saudi Arabia can influence the operation and output of a PV power plant; a topic that will be discussed in depth at the upcoming ‘Desert Solar in Saudi Arabia’, to be held on Wednesday 13 November in Riyadh.

During this one-day conference, which is jointly organized by the Saudi Arabia Solar Industry Association (SASIA) and the Netherlands-based Solarplaza, Saudi experts will discuss practical experiences and business cases in relation to the operation and maintenance (O&M) of PV plants in desert locations, an area which requires more attention than any other PV application.

“Saudi Arabia is a natural market for solar PV application. Not only is the country blessed with huge oil reserves, but its solar 'reserves' are definitely infinite. The potential is incredible,” says Edwin Koot, CEO and founder of Solarplaza, which has organized 40 international PV trade missions and expert conferences in the last nine years.

“Not only could Saudi Arabia power its whole country with solar energy, it could even generate enough solar energy covering the global yearly electricity needs, using just a relative small part of its desert area. The good news is that by generating more solar energy, more oil can be exported, generating higher revenues and profits. Saudi Arabia could become solar hub for the Middle East,” explains Koot, who is a senior PV expert working in solar PV industry since 1994.

Considering that the world’s biggest PV power plants are located in the deserts of Arizona and California in the U.S., valuable lessons can be gained from these projects and their performances, and from the O&M that they’ve required to date. The lessons learnt from PV power plants in U.S. deserts is yet another topic in the Desert Solar programme.

The conference will host a diverse group of participants from across the local and international PV industry, including project developers, EPC companies, O&M contractors, financial institutions, equipment manufacturers and industry consultants. Most importantly, the event will provide a much-needed meeting platform to facilitate matchmaking between Saudi and international companies.

Desert Solar is part of a one-week international solar PV trade mission to Saudi Arabia taking place from 10 to 14 November 2013. The trade mission will bring together a group of high-level solar business executives to explore all aspects of the Saudi PV market through intensive discussions and site visits to energy utilities and policy makers.