Riyadh – Decypha: Saudi Arabia is keen on diversifying its energy mix through focusing on renewable resources especially solar energy.
The renewable energy sector is expected to grow in the Saudi kingdom supported by plentiful solar availability, lands plots, high sovereign credit and “strong economic and strategic logic,” said Moody's Investors Service (Moody's) in a report published 5th of April.
Affected by lower international oil prices and increasing civil and industrial power demand, Saudi Arabia wants to reduce spending on oil consumption subsidies and enhance the usage of clean energy, the report said.
“However, credit challenges include a relatively untested regulatory framework for renewables; the lack of total cost recovery for the state utility Saudi Electricity Company; operating in the desert environment, which can impair plant efficiency; and a relatively undeveloped local supply chain given the lack of installed renewables capacity,” Moody’s said.
Planning to reduce the government’s contribution in the economy, the renewable energy market is planned to grow gradually. In a first step, the Saudi government launched an auction for 700MW of renewable capacity in February, targeting 9.5GW by 2030.
By Decypha Editorial Team
