Milestones in Saudi Arabia’s exciting transition

Just as the chimneys have been a landmark on Jeddah’s Red Sea coast since the 1970s, so the ending of their smoke emissions is another landmark, as the Kingdom’s Vision 2030 transforms the country’s potential. (Shutterstock)
Updated 07 September 2019

Milestones in Saudi Arabia’s exciting transition

  • September 5 marked the end of operation of a desalination plant in Jeddah after four decades
  • Saudi Arabia's transition to a global leader in the use of sustainable energy is under way

ABU DHABI: For more than four decades, the smoke rising from two chimneys of a water-desalination plant operated by SAWACO was a familiar sight along Jeddah’s Red Sea coast. Sept. 5 marked the end of emissions from the chimneys as the desalination plant ceased operations in line with the Kingdom’s ambition plan to wean itself off its dependence on polluting, fossil fuel-based technologies and to diversify its economy.
The chimneys, which were originally scheduled to stop operating in February 2020, harked back to an era that is being ushered out by Saudi Arabia’s transformation into a global leader in the use and development of sustainable energy.
That moment when the smoke stopped was a reminder of the Kingdom’s determination to adopt a sustainable path for both its water production and the wider energy sector in the interest of future generations.
“Water has always been an essential part of life in Saudi Arabia,” Colin Ward, a researcher at the King Abdullah Petroleum Studies and Research Center (KAPSARC), told Arab News.
“The desalination plants allowed the Kingdom to expand its water supplies beyond the capacity of its natural sources to support a growing population and economy.
“The removal of the last smokestacks at the Jeddah plant represents an exciting transition for Saudi Arabia.” Chimneys of power or desalination plants release smoke and gases formed during the burning of oil, coal or natural gas.
From the 1970s they became a familiar feature of coastal cities and towns in the cities of the Middle East when desalination plants began to piggyback off thermal power plants by a process known as co-generation.
In many Middle East countries, oil was burned to heat water into steam, which turned a turbine that drove an electrical generator. Simultaneously, the desalination process utilized the extra heat of the turbines to convert seawater into drinking water.
A downside of the technology is that the exhaust from co-generation plants contains gases harmful to the local environment, in addition to carbon dioxide, the rising levels of which are believed to be causing global warming.
“Thermal distillation was a crude solution that relied heavily on cheap and abundant energy, but it was inefficient,” said Ward. “Today, the Kingdom is on the cutting edge of desalination research and development — and is putting these advances into practice.”
Saudi Arabia’s position in the top five countries of the world in terms of water scarcity makes improvements in the way it produces, uses and distributes water imperative. Accordingly, it has drawn up a raft of plans to achieve greater water security, sustainability and efficiency.
The Saline Water Conversion Corporation (SWCC), the National Water Company (NWC) and the Saudi Water Partnership Company have teamed up to launch six major projects with an estimated total cost of 3.1 billion riyals ($800 million) to build some of the world’s most technologically advanced and energy-efficient desalination plants to serve pilgrims in Makkah and other holy sites. Separately, nine seawater desalination plants are in preparation in Jeddah with a total capacity of 240,000 cubic meters of water per day, according to Abdulrahman bin Abdulmohsen Al-Fadley, Saudi Arabia’s Minister for Environment, Water and Agriculture.
The Jeddah project will incorporate the latest technology to boost production efficiency and cut operating and capital costs, and “will have a significant impact on improving the quality and scope of water services,” Al-Fadley said in a statement earlier this year.

IN NUMBERS

3.1bn - Total cost in riyals of six new Saudi water projects.

5m - Cubic meters per day of desalinated water produced by Saline Water Conversion Corporation.

400 - Capacity in MW of newly launched Dumat Al-Jandal wind project in Al-Jouf.

30 - Renewable energy projects planned over next nine years.

For its part, the SWCC, which operates desalination plants and power stations in Saudi Arabia, said it has achieved a capacity of five million cubic meters per day of desalinated water, making it the world’s largest producer. KAPSARC’s Ward says efforts to overhaul Saudi Arabia’s water sector into a more eco-friendly, and sustainable sector will prove transformational.
“Improvements to technology, changes in primary energy pricing, and growing concerns over pollution have led to the development of cheaper and more efficient methods using membranes such as reverse osmosis,” he told Arab News.
Reverse osmosis, which involves taking seawater and passing it through a fine membrane to produce clean drinking water, is an increasingly popular and more environment-friendly method of desalination. The technology is being used in the Shuaiba Expansion II scheme, which began commercial operations in Makkah in May and has a capacity of 250,000 cubic metres of water daily.
Some experts say Saudi Arabia should rely, above all, on its experience for making decisions on the selection of appropriate desalination technologies for future applications. “Adoption of stand-alone or conventional membrane and thermally driven processes has future implications for the economy and levels of environmental and marine pollution,” Muhammad Wakil Shahzad, a research scientist at the Water Desalination Research Center (WDRC) at King Abdullah University of Science and Technology (KAUST), told Arab News.
“All conventional desalination processes are operating at only 10 to 13 percent of the thermodynamic limit. Sustainable desalination can only be achieved by ‘out of box’ solutions such as hybrid processes and highly efficient membranes applications.”
Ward points out that “research into renewable desalination is under way, with the largest solar-based experiment located in Saudi Arabia.” He says the transformation of the water sector points to a readiness on the part of Saudi companies to embrace a “greener” future.
Saudi Arabia is one of the 195 signatories to the 2015 Paris Agreement on climate change. It is leading by example, having launched a number of initiatives in renewable energy and energy efficiency of its own.

In line with the Kingdom’s Vision 2030 strategy, the Saudi government is planning to develop 30 solar and wind projects over the next nine years as part of a $50 billion program to boost power generation and cut oil consumption. It is planning to increase the contribution of renewables in its total energy mix to 27.3 GW by 2024, from wind as well as solar energy.
On July 8, the Renewable Energy Project Development Office (REPDO) of Saudi Arabia’s Ministry of Energy, Industry and Mineral Resources announced the bidding process and the timeline for 12 renewable energy projects, with a total capacity of more than 3 gigawatts (GW). The tenders were part of round two of the Kingdom’s National Renewable Energy Program (NREP). Following through on the announcement, on Aug. 2 REPDO invited bids for six solar photovoltaic projects with a total capacity of 1.47 GW.
For its part, the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, recently announced it wants to locate an electric vehicle industry in the Kingdom, following an agreement to invest more than $1 billion in a US-based electric-vehicle manufacturer. A number of projects are also in the works under the National Industrial Development and Logistics Program (NIDLP).
Saudi Aramco, the world’s biggest oil company, has already outlined its ambition to be part of the solution to tackle climate change. Among its decarbonisation policies are reduction of emissions, creation of natural “sinks” that absorb carbon emissions, and progress towards the goal of “Zero Routine Flaring by 2030” - an initiative introduced by the World Bank to eliminate routine flaring of gas - no later than 2030.
Against this backdrop, the September 5 shutdown of the chimneys of SAWACO’s desalination plant in Jeddah signified in a small way Saudi Arabia’s ongoing transition to an era of sustainable development and economic diversification.


Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

Saudi Arabia’s consumer behavior was transformed during the lockdown as soon as malls and stores were ordered to shut their doors, creating a frenzy among consumers. (SPA)
Updated 20 September 2020

Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

  • E-platforms played a crucial role in SMEs’ survival
  • COVID-19 transformed people’s shopping habits

JEDDAH: Saudis continue to shop online despite the government easing the COVID-19 lockdown, with the surge in e-commerce prompting small and medium-sized enterprises to adapt.

E-commerce saved global retail markets from collapse and stopped consumers from having to go out during the first wave of the outbreak. However, SMEs were the most vulnerable to the pandemic’s consequences and e-platforms played a crucial role in their survival.
Saudi Arabia’s consumer behavior was transformed during the COVID-19 lockdown as soon as stores were ordered to shut their doors, creating a frenzy among consumers although they were quick to adapt. SMEs were also forced to adapt, not only to accommodate the growing demand for online shopping but to ensure they survived with minimal losses.
Marion Janson, the chief economist at the UN’s International Trade Centre, said in June that around 20 percent of SMEs globally may not survive the pandemic.
A recent report from Visa revealed increased anxiety among merchants in Saudi Arabia, with 67 percent of small businesses noticing a decrease in average consumer spending.
Many Saudi consumers started shopping online for the first time, primarily for essentials. The Visa report showed that two-thirds of the Saudi consumers surveyed said that COVID-19 led to their first online grocery purchase, while 59 percent made their first online purchase from pharmacies.
“With the confusion at the beginning, we didn’t know what was acceptable and what wasn’t,” said Dr. Suhad Zain, a government employee in Jeddah. “Can we risk going out to shop for our daily needs or not? We needed to be sure that everyone in the house was safe, including the driver, and not expose ourselves to the invisible menace that changed our lifestyles. Most of our groceries were obtained online, from produce to water bottles to even appliances and leisure items. It had to be done, even though we needed time to accept the new change.”
Fear of the virus is expected to change the way consumers behave forever. “It became more convenient even after the lockdown was lifted,” Zain added. “After a few months we got used to it and, as a family, it became our new preferred means of purchase.”
Such conditions were a catalyst for online commerce, according to the Visa report, with 38 percent of merchants in the country reporting the introduction of online offerings as a direct result of the pandemic while more than half had an e-commerce presence before the pandemic.

Two-thirds of the Saudi consumers said COVID-19 led to their first online grocery purchase, while 59% made their first online purchase from pharmacies. (GettyImages)


The report also said there was a surge in e-commerce, a preference for trusted brands, a decline in discretionary spending, and a polarization of sustainability. Consumers have a larger basket, but reduced shopping frequency, and will shift to stores closer to home. A change can easily be detected in Saudi consumer behavior.
But the shift to online commerce, with cash transactions being replaced by digital payments, has negatively influenced cash-only retailers and presents a tough challenge to these merchants, who have to understand the shift in consumer behavior and adapt accordingly and urgently.
“Saudi business owners currently face multiple challenges that they need to deal with when they want to shift to e-commerce, some of them even lack the knowledge of how technology could benefit them and what options it could offer,” Talal Abdullah, a business development and marketing consultant, told Arab News.
“Also some will need to find a technical partner to successfully transform to e-commerce and, most importantly, they need to revisit their business model canvas to determine how they want to employ this technology for the best of their businesses.”
In order to overcome these challenges, Abdullah suggested that business owners look for the right technical partner based on their new model.
“If they fail to find a suitable technical partner, then they need to set a clear budget for the application or website they need to set up. But before reaching out to any company that offers support with these technical services, you must get in touch with real clients of these companies and inquire about their business and how they deal with them.”
He added that seeking assistance from technical consultants or owners of similar projects could cut down on time and effort. Joining business accelerators and incubators, as well as entrepreneurship and technology communities, could help with expanding knowledge and relationships and contribute overall to a smoother transition.
But these changes have their costs too, imposing new financial burdens on an already weakened business due to the pandemic and the time required to build and adapt a new business model that targets a completely different group of customers. It is a serious challenge for many small retailers.
Abu Mohammed has been in the retail business for 20 years. He used to have frequent customers who came in for a specific type of clothing with a certain price range. But, with the lockdown, he could hardly sell anything.
“I began targeting a different kind of customer in the past couple of years where I was importing new clothes and selling them through Instagram and e-commerce websites,” he told Arab News. “However I still cannot completely substitute my current store with a completely virtual one. That needs time and money to build a reputation.”
He said the lockdown had been a harsh experience for him and that he recognized the need to expedite his old plans to transform his store into an actual brand, since people were gradually moving toward online shopping from well-known brands.
“This transformation is not going to be easy at all,” he added. “It will need a good marketing plan and well-spent money not only on tools but also staff. It is a completely new experience, however. I know e-commerce is here to stay and it is our only way forward. Otherwise my work for years will gradually vanish. This crisis could be a blessing in disguise, who knows.”