Believe it or not: Even in Saudi Arabia, renewable power is cheaper than fossil fuels
Saudi Arabia signed deals to buy electricity from two large-scale wind farms that are cheaper than natural gas plants, as it aims to rapidly transition to a bigger share of renewables in the power grid.
The state-run Saudi Power Procurement Co. this week said it had agreed to purchase power at record-low prices from the wind projects to be developed in the kingdom by Japan’s Marubeni Corp. A combination of state backing and strong wind conditions in the country will help make the green power plants cheaper than fossil fuel alternatives, the head of the Saudi company said.
“What’s unique about these projects is they’ve achieved extremely low cost of electricity that is considered the lowest we’ve seen globally,” Mazin Albahkali, chief executive officer of SPPC, said in an interview. “Achieving extremely low tariffs on renewables is definitely helping reduce the cost of power generation in Saudi Arabia.”
Saudi Arabia, the world’s biggest oil exporter, has been a laggard in renewable power generation and gets the vast majority of its electricity from plants that burn oil and gas. But that’s starting to change as Crown Prince Mohammed Bin Salman looks to increasingly pivot the economy away from its dependence on oil. The country has a goal to generate half of its power from clean sources by the end of this decade, up from less than 1% in 2022, according to data from BloombergNEF.
While it’s not clear if Riyadh will reach that goal, the country is rapidly growing its fleet of solar farms and wind parks. By 2030, over
