King Abdullah City for Atomic and Renewable Energy (K∙A∙CARE) is to launch a PV-Diesel Hybrid RfP to boost local content sector in the Kingdom

• Middle East

• Energy and infrastructure

14-06-2017

We understand that K.A.CARE is due to launch a PV-Diesel Hybrid RfP, a key objective of which will be to stimulate the localisation of PV installation for diesel hybrid projects in Saudi Arabia. It is intended that this experience will be utilized to help create a PV for hybrid diesel installation business sector within Saudi Arabia.

Approximately 20% of the Kingdom's fuel consumption for electricity derives from diesel which is the most expensive fuel for the production of electricity. It is often utilised in remote areas where access to the central grid is not possible and will often come with high transportation costs. It has been coming increasingly apparent that the introduction of solar PV makes economic sense particularly as PV prices continue to decline whereas diesel prices are expected to rise quite significantly if historic subsidies are removed.

This project is important in our view because it anticipates future pricing changes within The Kingdom and the need to build up a local installation industry in line with the Technology Localisation Initiative which is a key part of the National Transformation Plan 2020. We are not clear on The Kingdom’s plans for encouraging storage as part of the composite solution but clearly this could be the next obvious step.

K∙A∙CARE plans to release a request for proposals for the project on June 12. We understand that only Saudi-owned companies will be eligible to respond to the RfP.

Companies interested in this project should contact the following email to obtain a copy of the RFP: asktl@energy.gov.sa

Eversheds Sutherland has a team based in Riyadh and Dubai which is currently advising on renewable energy projects in the Kingdom.

If you would like to discuss Saudi Arabia's renewable energy programme and any opportunities in the market please contact the team below.