‘Vast potential’ seen in Saudi Arabia’s solar power sector: report
But, Fitch forecasts its capacity growth will only go over 5.1GW between 2022 and 2031.
Saudi Arabia is amongst the ‘market to watch’ in solar power as it possesses some of the highest solar power potential in the world, Fitch Solutions reported.
Fitch noted the Saudi government has become increasingly supportive as it introduced long-term power sector plans that cover strategies to diversify its power mix.
Saudi Arabia recently launched the National Renewable Energy Programme that awarded contracts for the development of more than 1.7 gigawatts of solar power projects. It also aims to produce 2.9 million tonnes of hydrogen per year by 2030.
“While this target does not distinguish specific targets for green hydrogen production, the presence of large-scale green hydrogen projects in the pipeline indicates that renewable hydrogen will form a significant proportion of this production,” the report read in part.
“As a result, we note upside risk to our solar power forecasts in the burgeoning green hydrogen industry, which will place upward pressure on renewable electricity supplies and drive further investment in solar power over the coming years.”
Despite this, Fitch remained cautious on its Saudi Arabia outlook, projecting that its solar power capacity will go over 5.1 gigawatts between 2022 and 2031.
This is based on past trends where the kingdom underperformed in achieving its ambitious targets.
It added policy constraints, and the dominance of state-owned utilities could pose a challenge to solar power.