More Relief Than Surprise as Investor Abandons World’s Biggest Solar Project
There was little surprise and even some relief this week at the news that the world’s biggest solar project, a US$200-billion, 200-gigawatt megaproject proposed by the Saudi Public Investment Fund and multinational conglomerate SoftBank Group, had been cancelled after SoftBank walked away from the deal.
The project “had raised skepticism among developers when it was announced in March, partly because of technical concerns over how it might be integrated into the grid,” Greentech Media reports. “The main worry, though, was that the megaproject appeared to have been approved independently of plans for an orderly ramp-up of solar through a tender program managed by the Saudi Renewable Energy Project Development Office (REDPO).”
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It soon emerged that top Saudi officials had been left out of negotiations for the project. In the end, said Ben Attia, global solar analyst at Wood Mackenzie Power & Renewables, planning never got beyond an initial feasibility study.
By the end, the Wall Street Journal reported, Saudi energy officials were relieved when the project freeze was announced. “Everyone is just hoping this whole idea would just die,” one of them said.
But “although the SoftBank project was widely viewed as being doomed from the start, the cancellation is a further blow to the Saudi solar market,” Greentech states. After setting a 2032 deadline to install 16 gigawatts of photovoltaic solar in 2013, then extending the total to 41 GW including concentrating solar by 2040, the country only had 50 MW of PVs installed as of last year—although REDPO’s bidding process has seemed to be gaining traction.
while suspending the SoftBank project “is a step in the right direction for investor certainty,” Attia said, “the Saudi solar market’s future is still in limbo until the stated ‘broader, more practical’ renewables strategy is announced in about a month.”