TELF AG looks at Saudi Arabia’s energy strategies
A great energy potential
The global push towards ecological conversion is producing surprising effects, even changing the national strategies of some important global energy players. The objective of focusing strongly on decarbonization and a future dominated by renewable energy is leading many nations to review their medium and long-term objectives. Mostly due to the belief that the process of energy transition can only be accompanied by a joint effort by all countries.
In a global context of this kind, quite unexpectedly, Saudi Arabia made clear cuts to its oil extraction capacity a few days ago, clearly reducing its short-term objectives. With a note released recently, the company Aramco declared that it would stop plans related to expanding its production capacities, which should have reached 13 million barrels per day by 2027. The directive would have come directly from the Ministry of Energy, which would have indicated to the company not to go beyond the quota of 12 million barrels per day. Other valuable indications on Saudi Arabia’s energy strategy will most likely be expected next March when updates regarding capital investments will be released.
A precise national strategy
Is this perhaps a strategic move, given an imminent future dominated by new renewable energy sources? Despite still being one of the world’s largest oil producers, Saudi Arabia has sent quite eloquent signals regarding its involvement in the energy transition in recent years. The national strategy for 2030, commonly known as “Vision 2030“, explicitly talks about the need to develop the country’s diversification, especially in economic, social, and cultural terms. One of the cornerstones of the project, created by the Council for Economic and Development Affairs, is the reform of the kingdom’s energy production.
Saudi Arabia, moreover, has already invested massive amounts of money to promote economic diversification, making commitments at COP28 and deciding to bet on renewable energy. It is no coincidence that the kingdom is constructing the world’s largest plant for green hydrogen production, which, in theory, represents one of the key resources for sustainable planetary progress. Another quite eloquent indicator, in a certain sense, could be represented by Riyadh’s desire to focus on gas, the production of which it would like to double by 2030. For the development of the Jafurah gas field, the Aramco company has already initiated an investment of 10 billion dollars.
Among the most interesting projects linked to renewables is the Dumat Al Jandal wind farm, located 900km north of Riyadh. In the park, already operational and equipped with a power of 400 MW, there are currently around one hundred wind turbines active, each capable of producing electricity for thousands of homes nationwide. In Saudi Arabia, there is also the Sakaka solar power plant, which works through 1.2 million solar panels installed on an area of 6 square kilometers. The amount of electricity generated by the plant, which ensures an annual reduction of more than 600 tons of carbon emissions, is sufficient to meet the energy needs of more than 40,000 Saudi homes.
