In Short : Furthermore, Saudi Arabia and South Korea are working together on infrastructure and energy technology exports. South Korean President Yoon Suk Yeol and Saudi Crown Prince Mohammed bin Salman last month attended a bilateral investment forum in the Kingdom. And it was announced in June that Korean contractor Hyundai Engineering and Construction had signed a $5 billion deal to work with Saudi Arabia’s Aramco on a petrochemical plant in the Kingdom. Aramco has also signed an agreement with Korea National Oil for a joint oil storage business and will collaborate with Korea Electric Power and steelmaker POSCO Holdings when it comes to an ammonia production project.
In Detail : Saudi Arabia has been playing a key role when it comes to the growth of renewable and clean energy, not only in the Kingdom but beyond its borders too.
Some of the advantages for the Kingdom come from its advanced infrastructure, increasing investments in renewable infrastructure, robust demand in this field and its strategic significance.
Saudi Arabia is strengthening its decarbonization and clean energy collaborations, as well as investments, particularly in Asian countries’ renewable energy. In the last year, the Kingdom has sealed significant deals with Azerbaijan, Kazakhstan, Kyrgyzstan and Uzbekistan in order to expand energy corridors across the region.
Saudi Arabia has also invested billions of dollars in developing high-tech innovation hubs that could prove attractive to global companies that are interested in developing advanced clean technology. The Kingdom currently has 13 renewable energy projects under development, with the largest being the 2.6 gigawatt Al-Shuaibah solar plant. The total capacity of the 13 projects under development is estimated to be 11.3 GW. The Kingdom is also setting up the world’s largest green hydrogen production facility in a joint venture with ACWA Power, Air Products and NEOM.
In order to diversify its economy — and with a clear signal of its intent to adjust course in a more environmentally friendly direction — Saudi Arabia has announced hugely ambitious plans to build NEOM, the world’s first city without roads. This project is progressing with the help of a $10 billion joint venture with Denmark’s DSV, the world’s third-largest freight forwarder, which is providing logistical services. NEOM Green Hydrogen Company also received its first delivery of wind turbines at the Port of NEOM in northwest Saudi Arabia last month.
Of course, one cannot expect that Saudi Arabia and the other Gulf states will immediately ditch hydrocarbons altogether. The shift will come gradually and, as the cornerstone of their economies and a critical global resource, oil production will continue to be important and will provide significant and essential revenues to Gulf state governments.
The second informed policy of Saudi Arabia that is linked to its increasing investment in renewable energy is fighting climate change. Although some critics might think that a region that is the oil hub of the world is not an obvious place to look for innovation in green technologies, it is critical to point out that Saudi Arabia and other Gulf states have experienced a quiet shift in their understanding and recognition of the fact that avoiding action on climate change is no longer possible.
For example, Saudi Arabia is facilitating environmentally friendly corridors that aim to connect the continents of Europe and Asia by railway. Saudi Arabia and the US in September signed a memorandum of understanding that will see them cooperate on the creation of intercontinental green transit corridors that run through the Kingdom’s territory, according to a press release issued by the US State Department.
This will also help in sharing renewable electricity and clean hydrogen between countries and advances economic diversification. While the US is the world’s second-largest producer of solar energy, Saudi Arabia is a gateway to the Middle East and an obvious candidate for the mass deployment of solar power as a source of renewable energy.
Finally, Saudi Arabia’s efforts to combat climate change and advance green energy are anchored in its Vision 2030, since sustainability, clean energy and striving to achieve net-zero greenhouse gas emissions by 2060 are key pillars of this project. Vision 2030 also calls for expanding the country’s infrastructure and developing domestic manufacturing. This vision is one of the most ambitious and comprehensive plans introduced in the modern Middle East because it encompasses not only economic but also environmental, social and religious landscapes, along with political reforms.