(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON Feb 27 Saudi Arabia has the world's
second best solar resource after Chile's Atacama Desert, making
investment in solar a no-brainer as an alternative to burning
its most precious resource.
The Kingdom has for several years been talking up its plans
to become a major player in solar power.
Four years ago a senior oil ministry official told Reuters:
"We can export solar power to our neighbours on a very large
scale and that is our strategic objective to diversify our
economy. It will be huge."
Since then the country has installed about 10 megawatts, a
tiny fraction of cloudy England.
But the country has now detailed plans for installed
renewable power capacity in 2020 and 2032 which could put the
country among the world's top five solar power producers.
The competitiveness of solar photovoltaic (PV) power depends
on the installed cost (including the price of solar modules and
installation costs); local solar irradiation; and the cost of
the alternative, as illustrated by the retail power price plus
NASA solar irradiation data show that parts of Saudi Arabia
are second only to the world's driest desert, in Chile.
Solar module demand would be boosted by a similar shift in
other sunny, emerging economies with subsidised fossil fuel
Saudi Arabia is dependent on electricity both for energy and
water through desalination.
The main source of electricity is burning crude oil and
increasingly, natural gas.
The country burned some 192.8 million barrels of crude to
generate 129 million megawatt hours (MWh) of power in 2010,
Saudi and International Energy Agency data show.
Saudi power generators pay about $4 per barrel for their
oil, industry data show.
That works out at a running cost of $0.006 per kilowatt
hours (kWh) in 2010, excluding all other capital, fixed and
But accounting for the opportunity cost of exporting crude
oil at international prices of $113 per barrel raises the
economic cost of oil-fired power generation to $0.13 per kWh,
ignoring all non-fuel costs.
A simplified solar cost calculator developed by the U.S.
Department of Energy's National Renewable Energy Laboratory
(NREL) estimates the cost of solar power at $0.07 per kWh under
That assumes a capacity factor of 33 percent as can be
expected in sunnier locations in southern Saudi Arabia and a
full capital cost of $1.5 per watt, a conservative estimate for
That is before taking into account the annual degradation of
solar modules, and losses as result of dust, sand and high
temperatures, none of which are deal-breakers.
The NREL calculator also appears to ignore DC to AC
conversion losses which can cut power output by about 25 percent
compared with nameplate DC capacity.
GERMANY VS SAUDI
NREL has helped develop an open access database measuring
solar irradiance, with funding from the U.S. Department of
Energy and sourced from NASA.
It is part of a Solar and Wind Energy Resource Assessment
(SWERA) initiative started in 2001 with U.N. funding to advance
the large-scale use of renewable energy technologies.
The data is measured at one-degree resolution globally
averaged from 1983-2005 and calculated according to latitude and
Solar irradiance is calculated according to various formats,
for example a flat surface laid horizontal to the Earth ("Global
Horizontal Irradiance"), or tilted due south at the angle of
local latitude ("Solar Tilt"), or tilted southwards and also
tracking the sun ("Direct Normal Irradiance", or DNI).
The data reinforce how Germany is not the most obvious place
for the world's leading solar market.
The sunniest region of southern Germany has a DNI of 3.39
kWh per square metre per day. (See Chart 1)
Saudi Arabia's capital, Riyadh, has a DNI of 6.68 kWh, and
the vast empty land south of the city is as sunny as 7.99 kWh.
The country's Red Sea coastline north of the second biggest
city Jeddah rises as high as 8.60 kWh.
That appears to be the second sunniest place on Earth, only
over-shadowed by Chile's Atacama desert which has a DNI of up to
9.77 kWh per square metre per day.
See Chart 1: goo.gl/Kks9E
Local solar radiation determines how much power a given
solar module will generate.
Capacity factor is a term which compares the electricity
that a solar module actually generates compared with the
theoretical maximum if it were running at full capacity all the
The standard test conditions (STC) for assigning the
nameplate capacity of solar panels assume irradiance of 1,000
watts per square metre, or 24 kWh per square metre over 24
hours, at an ambient temperature of 25 degrees Celsius.
Such assumptions can be applied to actual field conditions
recorded by the NASA data to calculate a capacity factor.
A solar panel located south of Riyadh, for example, would
have a capacity factor of about 33 percent, given a local solar
irradiance of 8 kWh, compared with test conditions of 24 kWh per
There are further real-world losses associated with solar
In Saudi Arabia, high temperatures are relevant, where power
output falls by about 0.5 percent per degree Celsius above 25
degrees, according to NREL assumptions, probably not enough to
undermine its competitiveness.
Other emerging economies have rapidly growing power demand
and subsidised fossil fuel consumption including China and
The NASA data show that both these countries have locations
where solar irradiation rivals Riyadh.
Unsubsidised solar power can replace fossil fuels at scale
in such locations over the next decade at zero or negative cost,
with implications both for solar module and fossil fuel demand.
(Reporting by Gerard Wynn; editing by Jason Neely)