Saudi Arabia has halted plans for a $200bn solar project, which was to be developed alongside SoftBank Group Corp and intended to be the world’s largest solar-generation project.
According to the Wall Street Journal, the Saudi kingdom will instead focus its attention on a wider strategy to boost renewable energy, to be announced in late October.
SoftBank chief executive Masayoshi Son and Saudi Crown Prince Mohammed bin Salman announced plans to invest in the world’s biggest solar power project in March.
The scheme was expected to produce up to 200GW by 2030, more than three times the amount required by the country and equivalent to two-thirds of the world’s existing solar power.
The Japanese financial firm and Saudi Arabia have already set up a $100bn fund for technology company investments, called The Vision Fund, which has led to a flood of new money for start-ups.
Softbank is also expected to invest as much as $25bn in the kingdom in the next few years, with most of the funds going towards the new tech city NEOM, which was announced by Prince Mohammed during an investment summit last year.
Currently, Saudi Arabia has no solar power generation schemes, with the majority of its energy coming from fossil fuels. However, under the Crown Prince’s Vision 2030, the kingdom is expected to shift away from carbon-heavy sources to cleaner alternatives, with the country previously announcing plans to have 9.5GW of solar and wind capacity installed by 2023.
The country’s entry into the solar industry has so far faced a series of delays due to high costs and logistical issues, though the price of solar power has seen a recent dip in the region.
In particular, the UAE reported a dramatic fall in the cost of solar projects, reaching record lows for both photovoltaic (PV) and concentrated solar power between 2016 and 2017.
A 2017 Saudi tendering round further undercut these prices, with a new world record low of 2.34 cents/kWh for PV power.
However, progress on the kingdom’s renewable targets has been slow, and industry members have been sceptical of its viability.
Chief executive of Dubai-based Qamar Energy Robin Mills told Petroleum Economist: “There’s enough land and sun and it’s technically not as crazy as it might seem, but it would require a huge amount of storage and interconnectivity with neighbouring countries.
“But compared to current Saudi progress, and with all the logistical, organisational and financing challenges, it’s clearly never going to be achieved by 2030.”