Saudi Arabia Renewable Energy Market Size
| Study Period | 2019-2029 |
| Base Year For Estimation | 2023 |
| Market Volume (2024) | 8.33 gigawatt |
| Market Volume (2029) | 23.74 gigawatt |
| CAGR (2024 - 2029) | 23.30 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Saudi Arabia Renewable Energy Market Analysis
The Saudi Arabia Renewable Energy Market size is estimated at 8.33 gigawatt in 2024, and is expected to reach 23.74 gigawatt by 2029, growing at a CAGR of 23.30% during the forecast period (2024-2029).
Over the medium term, factors such as favorable government policies for the renewable energy sector are expected to drive the market.
On the other hand, as electricity demand grows rapidly, the country is likely to upgrade its energy production capabilities. As the country phases out older and more polluting diesel-fired generators, natural gas provides the perfect alternative for power generation. Due to this, as a part of Vision 2030, natural gas is expected to account for nearly 50% of the primary energy mix. Hence, the rising consumption of natural gas is expected to be a major factor restraining the growth of the renewable energy market in the country.
Nevertheless, Saudi Arabia does not have a domestic power generation company with expertise in the renewable energy sector while having a very large potential for solar power generation. The privatization of the power industry has allowed foreign companies, particularly from China and Europe, who have substantial experience with solar energy, to develop solar power plants, hence creating ample opportunities for the market players in Saudi Arabia soon.
Saudi Arabia Renewable Energy Market Trends
Solar Energy to Dominate the Market
- Saudi Arabia is naturally endowed with renewable energy sources, particularly solar energy. The country lies in the middle of the "sun belt" and receives an average of 8.9 hr/day of sunshine and an average horizontal solar radiation of 5,600 Wh/m2. The solar irradiation in the country is 250 w/m2, which is above the average irradiation of high-potential solar areas globally of 100-200 w/m2
- The country's capital, Riyadh, has yearly average sunshine hours of 3,230 hours, which is the condition of the entire landscape of the country. This creates a huge potential for solar power generation. As of 2019, Riyadh had an estimated potential for distributed solar capacity of around 4.34 GW, which can satisfy around 9% of central Saudi Arabia's total energy requirement.
- According to the International Renewable Energy Agency (IRENA), Saudi Arabia had a total solar installed capacity of 440 MW at the end of 2022 compared to 14 MW in 2012. Solar energy has been the most significant renewable energy source in the country, accounting for more than 95% of the country's installed renewable capacity.
- Under Vision 2030, more than 35 solar and wind energy farms are expected to be developed in the country by 2030. The Renewable Energy Project Development Office (REPDO) within the Ministry of Energy, established in 2017, is responsible for delivering on the goals of the National Renewable Energy Program (NREP) in line with Vision 2030.
- The NREP plans to develop 4,370 MW of solar energy by 2030, and about 6.17 million houses are expected to receive energy from the 12 solar projects under the NREP program. The 12 solar projects will reduce 98.18 million tons of CO2 per year, which will help the country achieve net zero carbon emissions and increase the share of renewable energy in the power mix.
- The country has been actively developing its renewable energy capacity with many large-scale solar projects. For instance, in June 2022, ACWA Power signed a 30-year power purchase agreement (PPA) with Saudi Power Procurement Company to develop a 91-MW solar project that is likely to be located in the Saudi capital - Riyadh. Under the agreement, ACWA Power is likely to develop, build, and operate the Layla PV Solar IPP in Al-Aflaj governorate in Riyadh province. The project is worth around USD 106.78 million.
- Hence, based on the factors mentioned above, the solar energy segment is expected to dominate the renewable energy market in Saudi Arabia during the forecast period.
Supportive Government Policies And Incentives Increasing Adoption of Renewable Energy
- To revitalize and diversify the economy and reduce overreliance on fossil fuel exports, the country’s government has decided to invest heavily in its Vision 2030, launched in 2016. Vision 2030 is a comprehensive strategic transformation roadmap consisting of financial, social, and environmental targets set by the Saudi government to invest and develop various nascent sectors, such as tourism and renewable energy, sustainably to improve the financial situation and the quality of life of the average Saudi citizen. Following its Vision 2030, the country has created several government-led schemes and plans to achieve its ambitious targets. It aims to reduce centralized control over different industrial sectors by encouraging private investments and fostering open competition in the market.
- One of the primary objectives of the Vision 2030 plan is the diversification of the country’s total energy supply mix by increasing renewable energy production. In 2021, the Saudi Green Initiative reinforced the Kingdom’s commitment to increase the share of renewable energy to 50% of its primary energy mix while producing the other 50% from natural gas.
- To achieve this target, the country plans to install nearly 58.7 GW of renewable energy capacity by 2030. The sector is being developed as per the Kingdom’s ambitious National Renewable Energy Programme (NREP), developed by the Renewable Energy Project Development Office (REPDO), the clean energy arm of the Saudi Ministry of Energy, Industry and Mineral Resources. REPDO will be responsible for realizing this ambitious target and overseeing the development of 30% of this target through competitive tendering. In comparison, the remaining 70% will be developed by the Saudi Government’s Public Investment Fund (PIF) through direct negotiation with developers.
- Saudi Arabia has significant renewable energy potential, and especially solar energy. According to a United States-Saudi Arabian Business Council report, the renewable energy sector is expected to be one of the fastest-growing industrial segments in the Kingdom. According to the report, assuming the current pace of development is sustained, the renewable energy sector in Saudi Arabia is expected to provide nearly 750,000 new jobs by 2030, with a significant part of them originating from the solar energy sector. The country is also likely to expand its renewable energy manufacturing base considerably, as the Kingdom aims to localize approximately 40-45% of the industry by 2028.
- According to the International Renewable Energy Agency (IRENA), Saudi Arabia had a total renewable energy installed capacity of 443 MW at the end of 2022.
- Such instances provide ample evidence for the fact that the Saudi government is making a concert at an institutional level to encourage the adoption of renewable sources and to attract foreign investments in the domestic renewable energy market. The helpful government policies and economic incentives are expected to be one of the most significant factors driving the market during the forecast period.
Saudi Arabia Renewable Energy Industry Overview
The Saudi Arabian renewable energy market is moderately fragmented in nature. Some of the major players in the market (in no particular order) include ACWA Power, Alfanar Group, Abu Dhabi Future Energy Company (Masdar), Electricite de France SA, and Engie SA., among others.
Saudi Arabia Renewable Energy Market Leaders
ACWA POWER
Alfanar Group
Abu Dhabi Future Energy Company (Masdar)
Engie SA.
Electricite de France SA
*Disclaimer: Major Players sorted in no particular order
Saudi Arabia Renewable Energy Market News
- November 2022: Saudi developer ACWA Power and a unit of the kingdom's Public Investment Fund (PIF) announced the development of a 2GW solar plant, which was expected to be the largest in Saudi Arabia and among the largest planned in the Middle East.
- September 2022: Saudi Arabia announced the launch of five new renewable energy projects, including three wind and two solar projects. These projects were part of the National Renewable Energy Program (NREP) and were going to have a total capacity of 3,300 MW. At COP27, Energy Minister Prince Abdulaziz announced three more projects plus a greenhouse gas credit scheme for 2023 and the creation of a “Circular Carbon Economy Knowledge Hub.
Saudi Arabia Renewable Energy Market Report - Table of Contents
1. INTRODUCTION
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET OVERVIEW
4.1 Introduction
4.2 Renewable Energy Mix, 2023
4.3 Renewable Energy Installed Capacity and Forecast in GW, till 2029
4.4 Recent Trends and Developments
4.5 Government Policies and Regulations
4.6 Market Dynamics
4.6.1 Drivers
4.6.1.1 Supportive Government Policies And Incentives
4.6.1.2 Rising Demand for Water and Renewable-Powered Desalination
4.6.2 Restraints
4.6.3 Rising Natural Gas Consumption for Power Generation
4.7 Supply Chain Analysis
4.8 PESTLE Analysis
5. MARKET SEGMENTATION
5.1 Type
5.1.1 Solar
5.1.2 Wind
5.1.3 Other Types (Hydro, Biomass, etc.)
6. COMPETITIVE LANDSCAPE
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 ACWA Power
6.3.2 Alfanar Energy
6.3.3 Abu Dhabi Future Energy Company (Masdar)
6.3.4 Electricite de France SA
6.3.5 Engie SA
6.3.6 Enel SpA
6.3.7 Vestas Wind Systems A/S
- *List Not Exhaustive
6.4 Market Ranking/Share Analysis
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
7.1 Development of Hybrid Renewable Energy Systems
Saudi Arabia Renewable Energy Industry Segmentation
Renewable energy is the energy collected from renewable resources such as sunlight, wind, the movement of water, and geothermal heat that are naturally replenished.
Saudi Arabia's renewable energy market is segmented by type. By type, the market is segmented into solar, wind, and other types (hydro, biomass, etc.). For each segment, the installed capacity and forecasts have been done based on megawatts (MW).
| Type | |
| Solar | |
| Wind | |
| Other Types (Hydro, Biomass, etc.) |
Saudi Arabia Renewable Energy Market Research Faqs
How big is the Saudi Arabia Renewable Energy Market?
The Saudi Arabia Renewable Energy Market size is expected to reach 8.33 gigawatt in 2024 and grow at a CAGR of 23.30% to reach 23.74 gigawatt by 2029.
What is the current Saudi Arabia Renewable Energy Market size?
In 2024, the Saudi Arabia Renewable Energy Market size is expected to reach 8.33 gigawatt.
Who are the key players in Saudi Arabia Renewable Energy Market?
ACWA POWER, Alfanar Group, Abu Dhabi Future Energy Company (Masdar), Engie SA. and Electricite de France SA are the major companies operating in the Saudi Arabia Renewable Energy Market.
What years does this Saudi Arabia Renewable Energy Market cover, and what was the market size in 2023?
In 2023, the Saudi Arabia Renewable Energy Market size was estimated at 6.39 gigawatt. The report covers the Saudi Arabia Renewable Energy Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Saudi Arabia Renewable Energy Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Saudi Arabia Renewable Energy Industry Report
Statistics for the 2024 Saudi Arabia Renewable Energy market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Saudi Arabia Renewable Energy analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
