Published: Thu, March 29, 2018
Medical | By Mark Scott

Look! Saudi Arabia & SoftBank Plan World's Largest Solar Project

Look! Saudi Arabia & SoftBank Plan World's Largest Solar Project

As of the end of 2016, the world as a whole had only installed 303 gigawatts of total solar photovoltaic capacity.

Speaking at a press conference in NY today, Saudi Arabia's Crown Prince Mohammed bin Salman and Softbank chief executive Masayoshi Son confirmed they had signed a memorandum of understanding to proceed with the project, which will make full use of the Middle Eastern sunshine.

Son said the ample sunshine and land, as well as engineers and workers, make the foray into solar there lucrative.

Saudi Arabia has cast light on its $200bn (£141bn) plans to cut its reliance on oil by rolling out the world's most ambitious solar power project through a deal with SoftBank. The project would come in at 200 gigawatts and would be about 100 times larger than the next biggest proposed development.

The solar panels will be imported at first, but the project will later include a panel manufacturing site, according to Son.

In the past year, the kingdom has signed a series of agreements with US and other foreign companies, but only a small number of deals have moved forward.

The kingdom's deal-making has quickened as it pursues Prince Mohammed's diversification goals.

"Importantly, these projects will help create up to 100,000 direct and indirect jobs in the Kingdom".

"Meeting the stated 10 to 20 percent equity threshold, especially with reinvested returns from earlier stages of the project, is probably feasible, but the availability of such a massive volume of commercial debt remains in question", he wrote in a GTM Research note.

But some analyst voices were skeptical that the massive plan will necessarily emerge as it is now being described. The push into solar power is part of Saudi Arabia's ongoing strategy to reduce its dependence on fossil fuels.

Attia is referring to the 3.2-gigawatt and 4-gigawatt solar farms that will constitute Phase 1 of the grand plan.

The Saudi investment is Softbank's second major global solar project.

Simply put, "Without lots and lots of long-duration batteries, they'll either be curtailing the solar generation or exporting it to other countries", Attia said. "But there are very few details and we've seen a history of grand claims and nonbinding agreements". It's also trying to create a thriving startup scene at home.

Installation of the solar panels is planned to start this year, and the project should start producing electricity by the middle of next year. Doing so would free up more oil for exports, the kingdom's main source of revenue.

Environmentalists have long said the kingdom could turn to solar energy. Electricity demand in the country has risen by as much as 9 per cent a year since 2000, according to BNEF.

Major solar installations, like nuclear plants, could also help free up oil burned for electricity at home for export overseas - which might hint at one additional motivation for the agreement.

The project is so big that it's expected to take more than a decade to finish.

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