Saudi Arabia Issues Rules for Small-Scale Solar Energy

Riyadh– Saudi Arabia’s Electricity and Co-generation Regulatory Authority (ECRA) issued a regulatory framework for electricity consumers to operate their own small-scale solar power generating systems which will allow self-consumption and export excess to the grid.

The authority aims to create an encouraging environment where consumers use solar energy as part of the goals of Vision 2030. The Kingdom has few renewable energy facilities but aims to generate 9.5 gigawatts of electricity from such sources annually by 2023 through 60 projects, investing between $30 billion and $50 billion.

The authority also declared that all excess electricity will be exported to the national grid and later, consumers’ excess electricity offset will be put against their future consumption and after a year they will receive cash payments at a tariff approved by the authority.

ECRA believes that this is an essential step forward towards the realization of the deployment of renewable energy in Saudi Arabia.

The energy ministry is drawing up an incentive program to encourage companies and households to generate their own solar power, but no timetable for its introduction has been set yet.

The authority determined a set of rules and regulations to ensure productivity during the installation of the systems and secure all required actions.

According to ECRA, the new regulations will be put into action as of mid-2018.

Households account for about half of power consumption in Saudi Arabia, much of it is for air conditioning due to weather conditions.

Al-Shehri Expects Growth in Energy Demand in Saudi Arabia by 6%

Riyadh-Governor of the Electricity and Cogeneration Regulatory Authority (ECRA) Dr. Abdullah Mohammed al-Shehri revealed that a study is being conducted to predict the load in the Kingdom for the coming 10 years, due to the decline in consumption during 2016.

Shehri said that the peak load, which represents the highest demand for electrical energy on the level of Saudi Arabia, reached 60.8 GW in 2016, 2.4 GW less than that consumed in 2015.

On the other hand, primary data indicated growth in Saudi Electricity Company’s sales in 2016 did not exceed 1 percent compared to 2015.

He further noted that the expected rate for growth demand in 2017 is between six and seven percent.

When asked whether there is a plan or a new pricing for the electricity bill and how it is going to be implemented, Shehri said that there will be a plan to reform the prices of energy and water.

“Prices of local energy products will be linked to export price indices, which mean the price of fuel specified by the Ministry of Energy and Mineral Resources.”

He said that specialized authorities will specify energy prices and date of the implementation, knowing that the date will also be associated with launching “Citizens Account Program.”

In an interview with Asharq Al-Awsat, Shehri confirmed that a regulatory framework will be issued soon to install solar cells.

“The regulatory framework contains procedures that organize the relationship between the consumer, who is qualified to install these cells, and the distribution service provider, reducing the consumption bill through self-consumption and exporting the surplus to the electricity distribution network,” Shehri explained.

The Governor of ECRA noted that Saudi Arabia seeks to produce 9.5 GW of renewable energy, expecting the Kingdom to launch around 700 MW of solar and wind energy, in the first phase of the program, for competition among independent producers.

The role of ECRA lies in controlling the launching of these projects and ensuring the transparency and fairness of the competition to guarantee receiving the best prices, he noted.

He told Asharq Al-Awsat that the Kingdom is very close to adopting a set of amendments to some of the clauses in the Saudi Distribution Code in order to facilitate the integration of renewable energy sources in the distribution network in light of the expectations for energy growth demand this year.

Shehri confirmed that the project’s design to link electricity between Saudi Arabia and Egypt is completed and the implementation phase has started whereas the project designed to link electricity with Turkey is still in its early stages.