Power and Electricity

With the growing global focus on renewable energy and the remarkable advancements over the past two decades, Saudi Arabia has concentrated its efforts on developing this vital sector. Many large investments have begun to take effect, particularly after the Saudi Arabia's significant position in the global energy sector was highlighted during the COVID-19 pandemic. Saudi Arabia's initiatives in renewable energy represent a significant investment and a core component of Saudi Arabia Vision 2030, which aims to diversify energy sources and achieve sustainable development. Saudi Arabia is committed to improving the efficiency and management of resources, creating an attractive environment for investors and developers, meeting the growing market demand for clean energy, and providing national services and products driven by creativity and innovation. These efforts reinforce Saudi Arabia’s position as a leading energy powerhouse on both regional and global levels.

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Saudi Arabia's Vision for the Energy Sector

Saudi Arabia follows a consistent and progressive approach aimed primarily at achieving further advancements in the energy sector. This aligns with the Saudi Arabia objectives and elevates its vision for the energy sector to new heights.

These objectives include, without limitation:

Diversifying the national energy mix used in electricity production,

Optimizing its energy mix, generating electricity in the most efficient least costly.

Maximizing and optimizing the renewables' share in Saudi Arabia.

Balancing the local energy mix.

Meeting Saudi's commitments to reducing carbon dioxide emissions.

Saudi Arabia also seeks to take advantage of its unique geographical and climate location, making its available energy sources a central and fundamental economic factor. The Ministry of Energy's main objective is to ensure the sustainable development of the petroleum, gas, and mining holds the highest value to the national economy, in addition to working to discover and exploit Saudi's petroleum, gas, and mineral resources and achieve the highest returns.

Electrical Sector

Saudi Arabia aims, based on a clear vision, to achieve sustainability and improve the efficiency in the electricity sector and thus the performance of the electricity sector through raising production efficiency, reducing the use of liquid fuel, increasing the level of environmental commitment, enhancing the reliability of the grid in order to produce electricity from renewable energy sources which is central to the optimization of the energy mix, and improving and digitizing the distribution networks to further enhance service reliability.

Since the electricity sector is intrinsically linked and integrated with the sectors of oil and gas, renewable energy and nuclear energy, the Ministry of Energy developed an integrated strategy for its sectors to align with the new electricity law, the sub-strategies, and executive programs of Saudi Vision 2030.

Electricity Sector Integration

The Ministry of Energy, in coordination with the Water and Electricity Regulatory Authority, has developed a long-term plan for the electricity sector and oversees its implementation following approval. This plan aims to protect consumer rights, ensure fairness among consumers, promote economic growth, and contribute to the societal welfare.
In line with the policies and strategies, the Ministry of Energy has adopted several developmental plans and programs for the sector, including:

Restructuring the electricity sector.

Defining the contribution of renewable energy sources to the optimal energy mix for electricity production.

Replacing liquid fuels at power plants with natural gas and renewable energy sources.

Expanding the use of automation and smart grid technologies to ensure reliable, efficient, and cost-effective electricity services.

Strengthening the electrical grid in Saudi Arabia and extending services to underserved areas while encouraging private sector participation in electricity activities and enabling fair economic returns, based on commercial principles.

Maximizing local content in electrical goods and services, localizing jobs, and supporting research and development activities related to the electricity sector.

Saudi Arabia’s Initiatives in the Energy Sector

The Ministry of Energy has launched numerous initiatives aimed at enhancing economic impact and achieving added value. These initiatives focus on developing core infrastructure to create a promising investment environment, attract high-quality investments, and establish Saudi Arabia as a global leader in the energy sector worldwide.

Saudi Arabia aspires to achieve global leadership in the energy sector, steering toward an innovative future that supports sustainable development. So, Saudi Arabia seeks to enhance its ability to address existing challenges while preserving national energy resources for future generations. To accomplish this, high-efficiency policies, programs, and developmental plans have been implemented to maximize the added value of the sector. Accordingly, the Ministry of Energy has outlined key strategic objectives, including:

Enhancing consumption efficiency and economic development.

Leadership in global energy markets.

Maximizing financial benefits.

Strengthening local content.

Managing carbon emissions.

Ensuring the security and reliability of supply chains

Optimal Energy Mix Program

The Optimal Energy Mix Program aims to produce electricity more efficiently and reduce costs by diversifying energy sources. Aligned with the strategic direction of the sector, this program leverages available technologies to achieve its goals, including reducing emissions and prioritizing the replacement of liquid fuels.
The program aims to balance the energy mix so that renewable energy and natural gas each contribute 50% by 2030. Targets for the energy mix are regularly reviewed and updated to ensure the desired outcomes are achieved.

Renewable Energy

The Ministry of Energy strives to achieve integration and interdependence of the various energy sectors as a driving force of development. These sectors include conventional energy, renewable energy, and, in the future, nuclear energy for peaceful purposes. By adopting innovative solutions, the Ministry aims to maximize the economic benefits of the energy sector for Saudi Arabia as a whole.

The National Renewable Energy Program is a strategic initiative under the Custodian of the Two Holy Mosques’ Renewable Energy Initiative and Vision 2030. It aims to optimize Saudi Arabia's share in renewable energy production while balancing the domestic energy mix and fulfilling the Saudi Arabia's commitments to reducing emissions.

The Ministry of Energy is diversifying the national energy mix used for electricity generation, by increasing the share of natural gas and renewable energy. Saudi Arabia is targeting the optimal energy mix—the most efficient and cost-effective means of generating electricity—by replacing liquid fuels currently used in power generation with natural gas and renewable energy. By 2030, renewable energy and natural gas will each constitute approximately 50% of the energy mix for electricity production.

In addition, the Ministry is advancing the renewable energy sector by creating a competitive domestic market that boosts private sector investments and fosters public-private partnerships. A testament to the Ministry's success in this area is that Saudi Arabia has achieved the world's most competitive prices for electricity generation projects using wind and solar energy.

Saudi Energy Efficiency Center

The Saudi Energy Efficiency Center was established in 2010 with aim to rationalize and increase the energy efficiency in production and consumption in order to preserve Saudi Arabia’s natural resources and enhance the economic and social welfare of the population.

In 2012, the national program to rationalize and increase the efficiency of energy consumption called "Saudi Energy Efficiency Program” was launched as a framework for a system coordinates energy efficiency effort in Saudi Arabia. In addition to the center, it includes several specialized government authorities, some governmental institutions and companies, and the private sector. The goal is to improve and increase the efficiency of energy use in three key sectors that consume more than 90% of primary energy:

These sectors, as classified in Saudi Arabia, are divided into:

Industry: 2.1 million barrels of oil are daily consumed, representing 46% of the total primary energy consumed.

Buildings: 1.3 million barrels of oil are daily consumed, representing 29% of the total primary energy consumed.

Transportation: 1 million barrels of oil are daily consumed, representing 20% of the total primary energy consumed.

TARSHID

TARSHID is the national energy services company, fully owned by the Public Investment Fund (PIF). It was established in 2017 to be a pioneer in the energy efficiency sector in the Kingdom of Saudi Arabia. It seeks to support the national sustainability goal by achieving significant energy savings.

TARSHID aims to play a leading role in developing the energy efficiency sector. This includes establishing a thriving industry in the field, attracting key international players, and drawing in foreign investments. Additionally, TARSHID contributes to creating thousands of high-skill jobs, thereby enhancing sustainable economic development within Saudi Arabia.

National Program of Circular Carbon Economy

Saudi Arabia has launched the Circular Carbon Economy National Program to draw a comprehensive roadmap, which includes technological localization and advancement through the implementation of the Carbon Circular Economy. The program is the result of joint efforts by different stakeholders that worked on developing and implementing mechanisms that cover all technical, administrative, engineering, and normative aspects in order to achieve the strategic objectives of sustainable social and economic growth, promote integrated climate-change solutions, and ensure global leadership in the field of circular carbon economy. During its presidency of the G20, Saudi Arabia introduced the concept of the Circular Carbon Economy (CCE), which was endorsed by the G20 as a comprehensive and integrated framework to address and manage greenhouse gas emissions using various available technologies.

This approach offers a sustainable economic method for managing emissions through four key strategies:

Reduction

Reuse

Recycling

Replacement

These four strategies align with Saudi Vision 2030 through its programs aimed at driving societal transformation by collaborating with all developmental sectors in Saudi Arabia, including energy, industry, water, agriculture, tourism, and more.

Crude Oil

Saudi Arabia has gained a leading position in the global petroleum industry. Saudi Arabia has 19% of global reserves, 12% of global production, and more than 20% of global oil sales. It also has a refining capacity of more than 5 million barrels per day, both internally and externally. The Saudi Arabia's fixed petroleum reserves are estimated at about 267 billion barrels. Saudi Arabia's vast oil reserves are distinguished as being among the lowest-cost reserves globally.

Saudi Arabia's influential role in global energy was evident during the coronavirus pandemic, where it reached the historic Organization of Petroleum Exporting Countries (OPEC) Plus agreement, and its subsequent efforts to strengthen the commitment of countries to their quotas from the cut, compensate for the excess amounts of quotas, and the impact of this agreement on the stability of global markets.

Oil Sustainability Program

The Oil Sustainability Program (OSP) was launched in 2020 with the participation of multiple government agencies, companies and research institutions for sustainability and increasing demand hydrocarbons as a competitive source of energy, by enhancing its economic and environmental efficiency. Saudi Arabia ensures that the transformation in the energy mix is carried out effectively and sustainably.

Development is based on several pillars:

The first pillar aims to generate demand in emerging markets by investing in infrastructure and accelerating growth in targeted markets.

The second pillar focuses on innovation and accelerating technological advancements to provide new uses for hydrocarbons.

The third pillar works on enhancing sustainability to secure an energy mix that is both economically and environmentally efficient, including hydrocarbons.

The program also aims to increase the added value of hydrocarbon materials, support companies in expanding their operations by developing innovative materials based on resources, and enhance their uses in new sustainable ways. This contributes to strengthening Saudi Arabia’s position as a leading force in this sector.

Natural Gas

Natural gas is an important natural resource in Saudi Arabia, and the Ministry of Energy seeks to maximize its exploitation through exploration, production, and investment. Natural gas is used to meet the growing demand for energy in the domestic market, where it is used as fuel for power plants and desalinated water production, in addition to being used as a staple for several manufacturing industries, as well as fuel in other industrial sectors.

Saudi Arabia is now the world's seventh-largest natural gas market. Although the main gas network can eliminate the associated gas burning, gas flares have the lowest gas burning density in the world, with less than 1%. By 2030, Saudi Arabia intends to discontinue habitually utilizing gas in burners.

For more information about the future of natural gas in Saudi Arabia, click here.

Energy in Numbers

267 billion barrels: Saudi Arabia's oil reserves

335 trillion cubic feet: Saudi Arabia's natural gas reserves

2,688 million barrels: Total crude oil exports from Saudi Arabia

Saudi Green Initiative

Based on Vision 2030, Saudi Arabia has taken tireless steps to build a more sustainable future. The Saudi Green Initiative was therefore launched in 2021 to protect the environment and transform energy and sustainability programs in Saudi Arabia to achieve its goals, through: