Riyadh, August 17, 2025 , In a pivotal shift for its energy strategy, Saudi Arabia, the world’s largest net crude exporter, is reducing domestic petroleum consumption by aggressively expanding renewable energy generation. This move marks a significant milestone in the kingdom’s Vision 2030 economic diversification plan.
Saudi Arabia is targeting 130 GW of renewable capacity by 2030, approximating India’s current solar capacity.
Presently, about 25–33% of domestic oil consumption is used within oil- and fuel-oil-fired generators to meet peak summer power demand.
The ambition: transition to a gas-renewables mix, with a goal of 50% electricity from renewables by 2030 and net-zero carbon emissions by 2060.
A recent $8.3 billion renewable investment—led by ACWA Power and Aramco Power—aims to deliver 15 GW through five solar and two wind projects by 2028, serving regions including Riyadh, Mecca, Medina, and Aseer.
Massive wind project: Dumat Al-Jandal wind farm, costing $500 million, now online with 400 MW capacity—reducing emissions by 880,000 tons/year and powering around 70,000 homes.
The broader renewables roadmap also encompasses 40 GW of solar PV, 16 GW of wind, and 2.7 GW of concentrated solar power under a $50 billion investment targeting 2030.
The energy transition aligns with geopolitical trends: the Gulf, including Saudi Arabia, is investing heavily in clean energy to curtail oil use, lower domestic costs, and enhance energy exports.
| Aspect | Current / Baseline | Target by 2030 |
|---|---|---|
| Domestic oil-fired power | ~25–33% of consumption | Significantly diminished |
| Renewable capacity | ~4.3 GW solar (end of 2024) | 130 GW total (solar + wind) |
| Renewables share in power | Low | 50% electricity generation |
| Planned new projects | ACWA/Aramco: 15 GW by 2028 | Fulfilled incremental increase |
| Major wind project | Dumat Al-Jandal: 400 MW | Operational, expanding capacity |
| Funding & Investment | $0 baseline | $8.3 billion (renewables), $50 billion plan |
| Emissions goal | Long-term fossil dependence | Net-zero by 2060 |
| Geopolitical role | Oil-focused influence | Emerging renewables exporter, China-linked |
Saudi Arabia’s Public Investment Fund (PIF) has taken an $8 billion writedown in the value of its Vision 2030 megaprojects (like NEOM), signaling financial pressures partly driven by falling oil revenues.
The 2025 budget forecasts a $27 billion fiscal deficit, with oil revenues declining; this underscores the importance of cost-effective projects like renewables.
Oil price shocks and deficit concerns suggest that mega-urban projects may be scaled back in favor of essential infrastructure and diversified energy investments.
Saudi Arabia’s pivot from oil to renewables, and cleaner alternatives like gas, reflects a pragmatic strategy amid fluctuating oil markets and global climate pressures. Investing in robust renewable infrastructure offers several advantages:
Energy security: domestic renewables decrease oil-burn for power, freeing more oil for export.
Economic resilience: renewable projects help bridge budget gaps amid lower oil income and megaproject write-downs.
Global positioning: the Kingdom is cultivating a new image, both as a clean energy investor and an emerging exporter, with partnerships (notably with China) boosting manufacturing localization.
