Renewable Energy Challenges and Opportunities in the Kingdom of Saudi Arabia

Abstract

This paper seeks to introduce the advantages of investing in renewable energy in Saudi Arabia. It concludes that investment in renewable energy is a promising strategy for creating more sustainable jobs for Saudi citizens and promoting the domestic economic diversification. The Saudi renewable energy sector shall increase the Saudi non-oil private sector’s contribution to the total Saudi economic activities. This research paper uses Leontief’s method to estimate the impact of investment in renewable energy through three main scenarios (investment of 25, 50, and 85 billion Saudi Riyal) over 5 years (2020-2025). The total value added, an additional expected growth in the gross domestic product (GDP) during the period from 2020 to 2025, is estimated to be around 2.7, 4.7, and 6.0 percent of the investment of 25, 50, and 80 billion Saudi Riyal in renewable energy respectively. The expected number of new jobs that would be generated in all three scenarios are 44,000, 90,000, and 150,000 thousand jobs. Moreover, further development of the Saudi renewable energy sector should encourage domestic energy consumption to be more efficient and less polluted. However, challenges typically thwart progress in the renewable energy sector. These challenges include technical problems, cost issues, and lack of financial sources. This paper proposes some solutions that should help circumvent these particular challenges.