British renewables firms are preparing to compete for a multi-million dollar windfall by snapping up contracts to develop wind, solar and power storage projects in Saudi Arabia through the kingdom’s $50bn renewables drive.
Within weeks the world’s largest producer of oil will launch a tender process for an ambitious renewable energy program which is expected to involve investment of between $30bn and $50bn by 2023 to help kick its addiction to fossil fuels.
The Saudis are planning to shift their power sector towards renewables, which is less expensive than its oil-burning power plants, in order to meet its rocketing demand for power which is increasing at a rate of 8pc every year.
Already UK renewable energy firms are preparing to compete for a share of the funding pot in what could prove a crucial test of the sector’s ability to export world-leading technology and skills.
The challenge is whether the UK developers can reduce their cost to match the prices of international players Baringa Partners’ Ilesh Patel Solar developers including Lightsource Energy, RES and Solar Century are expected to be first in line for a multi-million dollar Saudi windfall, and the Telegraph understands that a raft of energy storage, engineering and software firms are also preparing to take part in the tender.
Emma Pinchbeck, executive director of RenewableUK, said the industry is ready to take advantage of the Saudi deal as part of its wider drive to tap the $290bn global renewables market.
“British companies are moving as fast as they can to seek out contracts wherever they can internationally, and capturing economic value for the UK. This Saudi opportunity is just the latest.”
“In Saudi Arabia, for example, we already have members offering services as broad as delivering energy storage projects or supporting with land surveys,” she added.
ScottishPower boss Keith Anderson urged the sector’s supply chain to vy for contracts too, saying: “The UK renewable sector supply chain has a fantastic wealth of talent and experience and should now consider the opportunities in Saudi Arabia.”
But the UK industry will need to prove that it can reduce costs to keep pace with the plummeting cost of renewable energy technologies globally.
UK solar companies are racing to drive costs to below recent international tenders for solar projects which have been awarded at £25 a megawatt compared to UK auction prices closer to £75 a megawatt, said Ilesh Patel, a partner with Baringa Partners.
“The challenge is whether the UK developers can reduce their cost to match the prices of international players.
“I’m pretty optimistic that the best developers will be able to, especially if they move into joint ventures with complementary companies. They absolutely have something to offer but they have a lot of hard work still to do to reduce costs,” he added.
By Jillian Ambrose on 22 JANUARY 2017 for the Telegraph.