Tuesday, 9 October 2012

Makkah to build $640m solar energy project

30 Sep 2012

Authorities in the Saudi Arabian city of Makkah say they will build an SAR2.4bn (US$640m) solar power project capable of producing around 100MW of electricity, it was reported. According to Saudi daily Al-Eqtisadiah, the development is intended to meet growing energy requirements in the municipality and shave about SAR2.2bn off the holy city's electricity bill. "The project will be established on an area of about 2 million m². About 20 international consortiums consisting of about 100 companies will compete for the execution of the project", Osama bin Fadl Al-Bar, Mayor of Makkah, told the newspaper.

Al-Bar added that the location of the development would be chosen by the successful contractor, which would purchase the piece of land and then return it to Makkah authorities at the contract's close. Bids to build the project will open during the first week of next year, Al-Bar added. Depending on its success, he said, other municipalities in the Gulf's most populous nation could develop their own solar power strategy, which could save the kingdom up to 8m barrels of oil per day by 2030.

A report published by Citigroup last month said that Saudi Arabia, the world's largest exporter of crude oil, could become a net importer of oil by 2030 if domestic energy consumption continues to grow at its current rate. Oil demand for use in domestic electricity consumption is currently rising by about 8% annually, with around 3m barrels per day-or a quarter of total output-currently serving national energy requirements. All of Saudi Arabia's natural gas, the kingdom's other natural resource, is currently allocated for domestic consumption.