4 THE RISE OF RENEWABLES IN THE GULF STATES …
109
Saudi Arabia’s net metering initiative, the ‘Small Scale Solar PV
Systems Regulations,’ has been one notable arena where this kind of
inter-institutional competition has played out since 2016. This regulation,
first circulated as a white paper in 2017, intended to provide a framework through which businesses and individual energy users could install
solar PV on their properties, trade excess generated energy with the grid,
and benefit from the credit they accumulated later on in the evenings or
during other seasons of the year. 36 The regulations also outlined specific
requirements for consultants and contractors looking to qualify to work
on these programs, with the distribution service provider, the SEC in this
case, managing this process.
The regulation was set to go into effect in July of 2018, but as of Q4
2020 the program has still not gotten off the ground, perhaps because the
incentive structures of the main stakeholders are not clearly aligned. The
regulations were formulated by the electricity regulator and handed down
to the SEC, a nominally profit seeking and partially privatized entity;
which is now expected to ignore its economic incentives and assist its
customers in replacing power they supply with power from solar PV.
National Champions
Another story that comes out of the Saudi case, and mirrors earlier
developments in the UAE, is the emergence of new and powerful
constituencies that are driving and shaping the renewables development
agenda. Broadly speaking, the constituency consists of entities that are
looking to use the Saudi market as a launchpad to compete globally.
The first element of this constituency is ACWA Power, a Saudi
company that owns, invests in, and operates, power and water facilities globally. Following an investment in 2018, the company is also now
partially owned by the PIF. 37 Established in 2004, ACWA has been accumulating assets in the MENA region and as far afield as Vietnam and
South Africa. Its renewable energy unit has taken the forefront in recent
years, having won large IPP tenders in Morocco for one of the world’s
largest CSP plants, and in the UAE for a similarly large PV plant. More
recently, and unsurprisingly, ACWA also won Saudi Arabia’s first largescale PV tender for 300 MWp at Sakaka. 38 This has meant that ACWA
is now singularly well placed to take advantage of the large opportunities
afforded by Saudi Arabia’s renewables deployment target of 27.3 GWp
by 2024, and to use the portfolio it accumulates through this process to
109
Saudi Arabia’s net metering initiative, the ‘Small Scale Solar PV
Systems Regulations,’ has been one notable arena where this kind of
inter-institutional competition has played out since 2016. This regulation,
first circulated as a white paper in 2017, intended to provide a framework through which businesses and individual energy users could install
solar PV on their properties, trade excess generated energy with the grid,
and benefit from the credit they accumulated later on in the evenings or
during other seasons of the year. 36 The regulations also outlined specific
requirements for consultants and contractors looking to qualify to work
on these programs, with the distribution service provider, the SEC in this
case, managing this process.
The regulation was set to go into effect in July of 2018, but as of Q4
2020 the program has still not gotten off the ground, perhaps because the
incentive structures of the main stakeholders are not clearly aligned. The
regulations were formulated by the electricity regulator and handed down
to the SEC, a nominally profit seeking and partially privatized entity;
which is now expected to ignore its economic incentives and assist its
customers in replacing power they supply with power from solar PV.
National Champions
Another story that comes out of the Saudi case, and mirrors earlier
developments in the UAE, is the emergence of new and powerful
constituencies that are driving and shaping the renewables development
agenda. Broadly speaking, the constituency consists of entities that are
looking to use the Saudi market as a launchpad to compete globally.
The first element of this constituency is ACWA Power, a Saudi
company that owns, invests in, and operates, power and water facilities globally. Following an investment in 2018, the company is also now
partially owned by the PIF. 37 Established in 2004, ACWA has been accumulating assets in the MENA region and as far afield as Vietnam and
South Africa. Its renewable energy unit has taken the forefront in recent
years, having won large IPP tenders in Morocco for one of the world’s
largest CSP plants, and in the UAE for a similarly large PV plant. More
recently, and unsurprisingly, ACWA also won Saudi Arabia’s first largescale PV tender for 300 MWp at Sakaka. 38 This has meant that ACWA
is now singularly well placed to take advantage of the large opportunities
afforded by Saudi Arabia’s renewables deployment target of 27.3 GWp
by 2024, and to use the portfolio it accumulates through this process to