Saudi Arabia makes up for lost time in clean energy race

Saudi Arabia makes up for lost time in clean energy race
People watch a presentation on 'Neom', a vast new development planned for Saudi Arabia, which is investing heavily in renewable energy as part of the Vision 2030 economic blueprint
Updated 26 January 2018

Saudi Arabia makes up for lost time in clean energy race

Saudi Arabia makes up for lost time in clean energy race

LONDON: When Saudi Arabia announced its plan to embark on a program of renewable energy construction last year, the largest renewable energy project in the Kingdom was Saudi Aramco’s solar car park, according to Michael Liebreich, founder of Bloomberg New Energy Finance, the clean-energy research group.
But things move fast in the country these days, and clean energy is no exception. As part of the Vision 2030 program, Saudi Arabia plans to supply 9,500MW, or 10 percent of its power demand, from renewable sources by 2023 — and it fully expects to exceed this target.
“Saudi Arabia is now tendering for projects. It has done the first few and is getting a very good price for them, and it has a local champion in ACWA Power, which will deliver them,” Liebreich told Arab News. “But there’s a long way to go. It needs to build gigagwatts of this stuff, integrate it into the grid and figure out what that means for its power system.”
In 2018 alone, the Kingdom is seeking investment of up to $7 billion to build about 4,000MW of renewable energy capacity.
Saudi Arabia, the world’s largest oil producer, is looking to generate more energy from renewable sources, in part to reduce its greenhouse gas emissions as part of the Paris Accord on climate change, but also to allow it to sell oil abroad at full price rather than use it domestically where it is subsidized. Developing a renewable energy industry is also part of its Vision 2030 efforts to diversify the economy away from its dependence on oil and gas.
The Kingdom has come late to the renewable energy party, despite its abundant wind and solar resources, but as a result has benefited from the learning process that has taken place in the industry in the rest of the world, said Adnan Amin, director general of the International Renewable Agency.
“Saudi Arabia’s move into renewables is very significant. They are looking to mobilize about $50 billion,” said Amin. “It makes absolute economic sense for Saudi Arabia to embark on this as quickly as they are doing. The opportunity cost of burning oil for power is 90 percent of the cost of a barrel of oil, leaving aside the environmental issues.
“Renewables are incredibly cheap now. The latest bids for Saudi solar projects are around 2.5 US cents per kWh, which is about a quarter of the cost of oil,” he said. “They are also considering how to develop a local industry to create jobs domestically.”
Speaking at a recent renewables conference in Abu Dhabi, Turki Mohammed Al-Shehri, head of the Renewable Energy Project Development Office (Repdo), said that the ultimate aim of the National Renewable Energy Program was to create a globally competitive local industry. To this end, it has imposed demanding rules requiring 30 percent local content for projects awarded last year. In 2018, this requirement rises to 40-60 percent and from 2019 onwards, Repdo wants to see more than 60 percent of equipment being made domestically.
Al-Shehri conceded that there are trade-offs between local content, a low levelized cost of energy (LCOE), meeting deadlines, complying with renewable energy targets and creating jobs. “If we go for the lowest LCOE, we will have to sacrifice local content, for example.”
Even the huge growth in capacity planned between now and 2023 will not be enough to attract investment into local manufacturing facilities, Al-Shehri said. “We have to look beyond the 9.5GW. To capture local content, we need a 10-year pipeline of projects.”
Saudi authorities also hope to export renewable energy to the rest of the worldto complement the oil they export today, Amin said. “We see great potential to export cheap green energy from the region.”
Saudi Arabia may have lagged behind other nations in rolling out renewables, but the scale of its current ambitions — even as it remains the world’s most important oil producer — send an important message that renewable energy is here to stay.
“There is a new understanding that an energy transformation is underway and it is bringing very significant changes to energy systems around the world,” Amin said.


Saudi non-oil sector’s expansion continues

Saudi non-oil sector’s expansion continues
Updated 03 August 2021

Saudi non-oil sector’s expansion continues

Saudi non-oil sector’s expansion continues
  • Rising demand from domestic, overseas clients supported upturn: Survey

RIYADH: Non-oil business activity in Saudi Arabia maintained a sharp pace of expansion in July, despite slowing for the second month running, according to a survey released on Tuesday. 

Output grew at a sharp pace, underlined by a robust increase in new business inflows, but still staff levels rose only fractionally in July as firms continued to signal an excess of business capacity despite rising sales.

Rising demand from domestic and overseas clients supported the upturn, which some firms linked to competitive pricing strategies.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) fell for the first time in four months to 55.8 in July, from 56.4 in June, due to weaker growth in output, new orders and employment compared to the previous month. 

Employment prospects were also harmed by a drop in future output expectations to the joint-weakest for more than a year, despite the strong improvement in operating conditions that extended the current run of growth to 11 months.

Hiring growth weakened to a fractional pace, as only few firms reported needing additional staff and backlogs were reduced solidly, suggesting a wide gap between demand and full capacity in spite of a sharp increase in new orders in recent months

“While Saudi Arabia’s PMI continued to signal strong growth in the non-oil economy in July, our survey data related to business capacity highlighted that challenging economic conditions prevailed,” said David Owen, an economist at IHS Markit.

“Firstly, employment growth slowed to only a marginal pace, suggesting that many companies still have little need for new hires in spite of a sharp rebound in new orders. Secondly, backlogs of work fell at the second-quickest pace for a year, adding further evidence that businesses have yet to reach pre-pandemic levels of capacity utilization,” he said.

“Sustained rises in demand should help the economy move closer to full capacity over the second half of the year. However, a drop in business expectations to its joint-weakest since June 2020 illustrated growing doubts that this will be a smooth ride,” he said.

Nearly 27 percent of surveyed businesses reported an increase in activity, linked to strengthening client demand and a loosening of pandemic-related measures.


SABIC set to announce Q2 financial results

SABIC set to announce Q2 financial results
Updated 03 August 2021

SABIC set to announce Q2 financial results

SABIC set to announce Q2 financial results

JEDDAH: The Saudi Basic Industries Corp. (SABIC) said that it will hold a virtual press conference to review the financial results for the second quarter of 2021 on Thursday.

Yousef Al-Benyan, SABIC vice chairman and CEO, will attend the conference.

Based on the data available on Argaam news website, analysts predict profits of SR6.4 billion ($1.7 billion) compared to SR2.2 billion losses in the second quarter of 2020.

SABIC is seeking to become the largest petrochemical company in the world by 2030. 

The petrochemical industry in the Kingdom has a significant impact as it contributes more than SR260 billion annually to the gross domestic product (GDP), representing 36 percent of the industrial GDP and more than 57 percent of non-oil exports.


Startup of the Week: Skil Studio; Perfecting the art of marketing, designing

Startup of the Week: Skil Studio; Perfecting the art of marketing, designing
Updated 04 August 2021

Startup of the Week: Skil Studio; Perfecting the art of marketing, designing

Startup of the Week: Skil Studio; Perfecting the art of marketing, designing

JEDDAH: Zakaria Ahmad owns a digital design agency called Skil Studios focused on identity building, graphic designing, and social media content building.

“We were working with another company but recently started our own business,” said Ahmad.

The entrepreneur is grateful for the customers who trust them with the design and layout.

Their services start with designing the identity that represents their clients, then services such as digital marketing, e-commerce, and social media content development are also offered. Sometimes the business also offers videography and photography services.

The company’s founder said that most companies here focus more on quantity rather than quality. He said his company’s goal is to start an agency that cares about its clients and has their best interest in mind.

“We appreciate art in everything,” Ahmad said. He believes marketing and identity building is an art and his company seeks to achieve the target with perfection.

He said that they want to offer something new. Ahmad said his team does not believe in “copying and modifying already existing designs,” instead they want to introduce the latest global trends in the Middle East without compromising on their uniqueness.

He admitted that the business faced quite a few challenges along the way, which is usual for a startup.

“We were looking for talented people with a passion for designing and art to help us achieve our goals,” Ahmad said.

Ahmad is most proud of his company’s identity and the trust that his team has built with clients due to their sincere efforts.

He said members of the creative team ensure they understand the requirement of clients and deliver them whatever their demands are.


WEF leader urges countries to ‘pay close attention’ to digital currency

WEF leader urges countries to ‘pay close attention’ to digital currency
Updated 03 August 2021

WEF leader urges countries to ‘pay close attention’ to digital currency

WEF leader urges countries to ‘pay close attention’ to digital currency
  • The Asian superpower recently announced it will allow foreign visitors to use digital yuan in the upcoming Winter Olympics

DUBAI: Digital currency is going to play a big role in the global economy, a World Economic Forum (WEF) committee leader said, and nations need to pay attention to its unprecedented progress.

“Somebody needs to be paying close attention to this space, and assessing on a weekly basis, what the national policy ought to be regarding digital currencies,” Sheila Warren, deputy head of the Centre for the Fourth Industrial Revolution (C4IR) committee of WEF, told Arab News.

Digital currency will continue to evolve, she said, adding some nations have already started investigating its effect on their own economies.

“We’re going to see a variety of offerings in the digital currency space — central bank digital currency, stable coin issuances, and cryptocurrencies including Bitcoin,” Warren explained.

According to Atlantic Council, which tracks central banks’ participation in the space, 81 countries have already explored a digital currency with China leading the pack.

The Asian superpower recently announced it will allow foreign visitors to use digital yuan in the upcoming Winter Olympics.

Other major central banks in the race are the US Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England.

In the Gulf, Saudi Arabia and the UAE previously said they were working jointly on a digital currency plan — they called the initiative “Project Aber.”

The two countries aim to develop a cross-border payment system that will reduce transfer times and costs between banks.

Although every nation doesn’t necessarily have to “immediately jump in,” Warren said it is important to watch the evolution of the industry.

“If you're not doing that, you're going to be stuck, I think, with whatever the world decides, the direction of travel is going to be, and not have enough opportunity to help shape that,” she explained.

On decentralized cryptocurrencies, including bitcoin, Warren said it will continue to have a huge role in the global economy as well.

“We’re going to see an increase in market cap, an increase in market share of the suite of digital currencies,” she said.

The private sector will take advantage of this by developing some of a blockchain or distributed ledger, she added.


Tunisians hope for better times ahead

Tunisians hope for better times ahead
Updated 03 August 2021

Tunisians hope for better times ahead

Tunisians hope for better times ahead
  • The proceeds from selling the plastic, combined with limited financial assistance from the government

TUNIS: As day breaks over Tunis, Jamila Ghuili takes her two small children out into the streets to scavenge in waste bins for plastic bottles that she sells to buy food for her family.
Abandoned by her husband, the single mother lives in a poor part of Omrane Superieur, a neighborhood of the capital where Tunisia’s economic malaise is acutely felt.
“Everything has become expensive,” said Ghuili, as her children played next to her.
Exacerbated by the repercussions of the COVID-19 pandemic, economic grievances have fueled discontent in Tunisia, leading to protests that encouraged President Kais Saied to remove the prime minister and assume governing authority last month.
Ghuili, 55, gathers a few kilograms of dirt-covered plastic each day, foraged from heaps of garbage dumped at the roadside.
The proceeds from selling the plastic, combined with limited financial assistance from the government, amount to 190 Tunisian dinars ($69) a month, around half her monthly rent.
Hamza Ayari, who buys the bottles and re-sells them to factories, says many people are doing the same. “They don’t have any other job, they are poor people,” he said.
Desperate for better lives, some of Omrane Superieur’s residents are hopeful about Saied’s move.
“I salute the people who voted for him, he is a good person,” said Fakhreddine Wannas, 56, a resident. “I hope he can take us out of the dark and into the light.”
It echoes sentiment expressed by other Tunisians who are fed up with political bickering and want to see an improvement in the economy — which shrank by 8.8 percent last year — and more effective action against COVID-19.
Saied, who was elected in 2019, says he will not become a dictator and that the actions he took on July 25, including the 30-day suspension of parliament, were constitutional. He has yet to set out next steps.
Soumaya, who paints henna tattoos for a living, expressed relief about the situation, saying that for a long time Tunisians did not know where they were heading. “Now we are all happy,” said Soumaya, as she painted a child’s hand.