The Union Cabinet chaired by Prime Minister Narendra Modi has approved a Memorandum of Understanding between India’s Ministry of New and Renewable Energy and Saudi Arabia’s Ministry of Energy for cooperation in the field of renewable energy.
The MoU aims at setting up a framework for cooperation between the two countries in renewable energy. This includes helping Saudi Arabia increase the efficiency of renewable energy in its national energy mix.
The MoU covers development of renewable energy projects, upgrading the level of related technologies and their applications, as well as development and localization of renewable energy value chain.
Potential of cooperation
Saudi Arabia—which lies in the middle of the “sun belt”—receives solar irradiation of 250 W/m2, which is well above average irradiation of high-potential solar areas globally (100-200 W/m2). Though it ranks as the sixth country with the highest potential for solar energy production, renewable sources constitute a small fraction (<1%) of its energy mix.
Saudi Arabia’s National Renewable Energy Program is designed to balance the country’s power mix, whilst working towards carbon reduction commitments.
In January this year, the country raised its solar target for year 2023 from 5.9 GW to 20 GW, with the aim for renewables revised up from 9.5 GW to 27.3 GW. It has also set a 40 GW target for solar and a 58.7 GW target for renewables overall by 2030.
As Saudi Arabia targets to increase renewable energy generation capacity, it places strong emphasis on localizing significant portion of the value chain, including R&D and manufacturing.
Saudi Arabia is interested in joining forces with India to develop complementary supply chains as well as deploying finance and new technologies.
“The lowest cost PV solar project is in Saudi Arabia. I think some of the developments in financing, as well as future technologies that we will be developing in the kingdom, will be given priority, hopefully to be deployed as part of India’s solar vision,” said Khalid A. Al-Falih, Saudi Arabia’s energy, industry and mineral resources minister, and Chairman of Saudi Aramco, the world’s biggest oil producer, at the India Energy Forum sponsored by CERAWeek recently in New Delhi.