Opportunity In Diversity – The Kingdom of Saudi Arabia

Diversity in opportunity

In recent years, we have seen significant growth of large-scale and distributed segments of solar energy solutions, shifting the attention of communities, investors and businesses towards the use of renewable clean energy. With the recent growth in the renewable energy sector, the Kingdom of Saudi Arabia strives to build the best future for the country as per the vision2030.

If we talk about Saudi Arabia, the main challenge in the region is to create a solar market that is resilient and have a number of strong and competitive independent developers. The growth of these developers may lead to the development of the countries by generating electricity and jobs in the region. Many of the different countries in the MENA region have achieved their current status by implementing different ways such as government-led procurement programs for  utility-scale solar projects.

KSA in Recent Years

The Kingdom of Saudi Arabia has met the challenge of making a strong solar developers network in recent years and a lot of small and large-scale solar power projects have been developed in different countries of the region. What has been achieved in Saudi Arabia in the clean energy space in such a short period of time is remarkable. However, there is always room for improvements and there are certain areas where the regularities can look to change and improve.

A handful of utility-scale developers have occupied the market which has led the small-scale developers to move out of the region and develop somewhere out of the region. This may lead to losing potential investors and small-scale developers and may slow the process of the solar market growth as the large-scale projects take more time and investment to be fully operational. This current status means that the region is losing out on the investment of a number of independent small-scale developers.

A diversified developer base has worked successfully in other global markets and has a number of advantages including a lower risk of one large developer going out of business, use of different skills and techniques for the work, a larger number of developers competing for projects which typically drives efficiencies, and diversified funding models which share the risk.

With increased attention towards the utility-scale developers, Independent small scale developers are moving out of the region because they are having difficulties due to different regulations by the authorities, Increase competition and less interest of utility-scale developers. To tackle the churn out and hold the investment in the region, there should be a policy which centralizes the development of clean energy in the region so that the small scale developers can also work with the utility-scale developers to deliver mega projects. Independent developers can add significant value by developing more clean energy projects.

The only key to speed up the process of development and put more emphasis on the use of the renewable energy sector is to get the right balance between both the small and large-scale developers.

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