Renewables are unlikely to displace global demand for oil, with crude continuing to play a critical role in the regional pivot towards refined products and chemicals, according to the Saudi energy minister.

"I’m not concerned about the role of renewables. Renewables are going to primarily displace sources like coal,” Khalid Al Falih speaking at Abu Dhabi Sustainability Week.

"Oil has never, or at least for the last 30 to 40 years, been a significant contributor to power generation, so renewables come in at a large scale - which will take time by the way - into utilities and stationary applications of energy, [but] does not conflict with the role of oil in the energy mix, [which is] primarily to transform into chemicals."

Saudi Arabia, the world’s largest crude exporting nation, is developing large-scale multi-billion dollar downstream complexes adjacent to industrial hubs along its eastern and western coastlines.

The kingdom, which is moving away from burning crude for electricity generation to gas-fired power plants, is also advancing an ambitious renewable energy strategy.

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Saudi Arabia’s sovereign wealth fund will develop 70 per cent of the kingdom’s renewable energy capacity amid plans to install 60 GW of cleaner sources over ten years as the kingdom looks to free up more crude for export.

"The PIF [Public Investment Fund] and its selected partners will develop 70 per of the total renewable energy capacity with the objective of accelerating localisation of our manufacturing capability,” said Mr Al Falih.

"While the ministry through the Repdo [Renewable Energy Project Development Office] will continue to drive breakthrough prices through the kingdom by competitively tendering the remaining 30 per cent."

Saudi Arabia last year announced it was adding substantial renewable capacity to grid through its newly established Repdo within the kingdom’s energy ministry. Around 9.5GW of solar and wind capacities will be tendered for development by 2023, as Saudi Arabia’s moves its power generation away from fossil fuels.

The kingdom has already begun switching from burning of crude to gas-fired power plants.

"Over the coming decades liquids burning in our utilities which takes over 50 per cent of our power generation and a significant proportion of our water distillation will be virtually eliminated,” said Mr Al Falih.

The share of gas in the power generation mix will the grow from 50 per cent at present to 70 per cent over the next 12 years.

"Therefore the share of gas in the utilities in the kingdom of Saudi Arabia will be the largest among the major G20 economies,” he said.

"In fact over the next 10 years, we will develop domestically close to 60GW of renewable energy capacity of which 40GW will be photovoltaic cells, 3GW will be concentrated solar power and 16GW will be wind."

Riyadh will tender at least 12 projects across the renewable value chain in 2019 alone.

The kingdom would also look to introduce nuclear energy into the mix with two reactors with a combined capacity of 3.2GW set to come online within the next decade.

Mr Al Falih said plans were also underway to restructure the kingdom’s electricity industry.

"Over the next decade, we’ll create in the kingdom a global hub of renewable agency,” he added.

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Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, and Dr Sultan Al Jaber, Minister of State, chairman of Masdar and chief executive of Adnoc Group, stand for a photograph with this year's winners of the Zayed Sustainability Award. Mohammed Al Hammadi / Ministry of Presidential Affairs
Dr Sultan Al Jaber delivers the welcoming speech at the opening ceremony of the World Future Energy Summit 2019, part of Abu Dhabi Sustainability Week. Mohamed Al Hammadi / Ministry of Presidential Affairs
Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, Moulay Rachid, Prince of Morocco (3rd L), Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, and other dignitaries attend the opening ceremony of the World Future Energy Summit. Rashed Al Mansoori / Ministry of Presidential Affairs
Dignitaries and guests attend the opening ceremony of the World Future Energy Summit at Abu Dhabi National Exhibition Centre. Hamed Al Mansoori / Ministry of Presidential Affairs
Sheikh Nahyan bin Saif (3rd L), Sheikh Rashid bin Hamdan (5th L), and Sheikh Zayed bin Sultan (6th L), attend the opening ceremony of the World Future Energy Summit on Monday. Rashed Al Mansoori / Ministry of Presidential Affairs
Sheikh Mohamed bin Rashid and Sheikh Mohamed bin Zayed stand for a photograph with for a group photo with Heads of State, during the opening ceremony of the World Future Energy Summit. Seen with Dr Sultan Ahmed Al Jaber, Moulay Rachid (2nd L), Ibrahim Solih, President of the Maldives (3rd L), Mohamed Abdel Aziz, President of Mauritania (4th L), Joao Lourenco, President of Angola (7th L), Ibrahim Keita, President of Mali (8th L), Milo Djukanovic, President of Montenegro (9th L), Hage Geingob, President of Namibia (10th L), Yang Jiechi, Special Representative of the Chinese President (L), Shahin Mustafayev, Minister of Economic Development of Azerbaijan (2nd row L) and Taneti Mamau, President of Kiribati (2nd row R). Mohamed Al Hammadi / Ministry of Presidential Affairs
Sheikh Mohammed bin Rashid and Sheikh Mohamed bin Zayed attend the opening ceremony of the World Future Energy Summit. Seen with Mohamed Abdel Aziz, Sheikh Ammar bin Humaid Al Nuaimi, Crown Prince of Ajman, Ibrahim Solih, President of the Maldives (3rd R), Joao Lourenco, Sheikh Sultan bin Mohammed Al Qasimi, Crown Prince of Sharjah, Ibrahim Keita, (8th R), Sheikh Maktoum bin Mohammed, Deputy Ruler of Dubai (9th R), Hage Geingob, (10th R) and Sheikh Hazza bin Zayed, Vice Chairman of the Abu Dhabi Executive Council. Mohamed Al Hammadi / Ministry of Presidential Affairs
Yang Jiechi, Special Representative of the Chinese President (on screen), delivers the key note speech. Hamed Al Mansoori / Ministry of Presidential Affairs
Sheikh Mohamed bin Zayed and Mohamed Abdel Aziz present an award to a representative from ‘ECOSOFTT’, winners of the Zayed Sustainability Prize in the water category. Hamed Al Mansoori / Ministry of Presidential Affairs
Sheikh Mohamed bin Zayed presents an award to a representative from 'Sanku', the winners of the Zayed Sustainability Prize in the food category. Rashed Al Mansoori / Ministry of Presidential Affairs
Sheikh Mohamed bin Zayed presents an award to a representative from 'We Care Solar', winners of the Zayed Sustainability Prize for in the health category. Hamed Al Mansoori / Ministry of Presidential Affairs
Sheikh Mohamed bin Zayed meets with Ibrahim Solih, President of the Maldives (L), at the World Future Energy Summit. Mohamed Al Hammadi / Ministry of Presidential Affairs
Sheikh Mohamed bin Zayed meets with Hage Geingob, President of Namibia (L), on the first day of the World Future Energy Summit. Mohamed Al Hammadi / Ministry of Presidential Affairs

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