Even the world’s largest producer of oil understands the value of developing renewable energy.

A few months after Saudi Arabia’s oil minister called global warming “among humanity’s most pressing concerns,” the country is rolling out an ambitious plan to source 41,000 megawatts of solar projects over the next two decades — scaling up a domestic solar industry to support one third of electricity production by 2032.

Solar electricity and petroleum serve completely different markets. However, in this case, solar will be directly replacing the oil that Saudi Arabia uses for desalination plants. Officials are currently rolling out a competitive bidding process for 1,100 megawatts of solar photovoltaics and 900 megawatts of concentrating solar power in the first quarter of 2013.

The plan is part of a larger strategy to scale up various sources of renewable energy, build a new domestic industry, and reduce oil consumption. Officials estimate that the solar plan will reduce domestic consumption of oil by 520,000 barrels per day. PV Magazine reported on the news from a solar conference in Saudi Arabia:


The oil-rich country is planning to place more focus on renewable energy generation. In addition to more solar power, it intends to add wind, geothermal, waste-to-energy and nuclear plants to its energy mix in the future. The program, said to be worth tens of millions of dollars, aims to “catapult Saudi Arabia into the group of global leaders in renewable-energy development.”

Of the 41 GW of solar, photovoltaics is expected to comprise 16 GW, while concentrated solar power (CSP) will encompass 25 GW. “The CSP plants, with their higher capacity factor than PV, are foreseen as a bridge between base-load technologies (including geothermal, waste-to-energy and nuclear) and PV, which will provide coverage for daytime demand,” explained Apricum, a strategy consulting and transaction advisory firm specialized in renewable energy.

In a recent speech, Saudi Arabia’s Oil Minister Ali Al-Naimi expressed concerns about climate change, saying “societal expectations on climate change are real, and our industry is expected to take a leadership role.”

It would be nice to think that the Saudis were doing this for climate change reasons. But they’re doing it for more selfish objectives: jobs and efficiency.

In that same speech, Al-Naimi explained the need to support new energy industries that can create more jobs than the oil sector: “We know that pumping oil out of the ground does not create many jobs. It does not foster an entrepreneurial spirit, nor does it sharpen critical faculties.”

According to the Saudis, what does foster that entrepreneurial spirit? Renewable energy.

In a report from Bloomberg Businessweek on the recent announcement, a consultant with the Saudi government, Maher al- Odan, explained the country’s strategy: “We are not only looking for building solar plants….We want to run a sustainable solar energy sector that will become a driver for the domestic energy for years to come.”

The plan will also help the country save hundreds of thousands of barrels of crude per day. With diplomats and energy experts privately concerned that Saudi Arabia has overstated its oil reserves by as much as 40%, the country will need new resources to make up for declines in production.

This announcement shows the importance of renewable energy — even for the world’s largest exporters of fossil fuels.