On July 16th, Chinese listed company TCL Zhonghuan signed a shareholder agreement with Saudi Arabian Public Investment Fund (PIF) and Saudi Arabian Energy Equipment Company (Vision Industries) in Shenzhen, China. The three parties will jointly invest to establish a joint venture company to promote the localization production of solar photovoltaic crystal chips in Saudi Arabia. The total investment amount of the project is about 2.08 billion US dollars. The three parties will invest and finance with TCL Zhonghuan holding 40%, PIF's wholly-owned subsidiary RELC holding 40%, and Vision Industries holding 20%.
On July 16th, Chinese listed company and leading photovoltaic module enterprise Jinko Solar announced the establishment of a joint venture in Saudi Arabia to build a 10 gigawatt high-efficiency battery and module project, with a total investment of approximately 3.693 billion Saudi riyals (approximately 7.177 billion yuan). Nine months ago, JinkoSolar signed a 3.8 GW N-type component agreement with Saudi International Power and Water Company.
Recently, several Chinese new energy companies have announced the signing of cooperation and investment agreements with Saudi Arabia, indicating that Saudi Arabia has become a hot spot for China's new energy exports. This is not only related to China's global dominance in the new energy industry, its leading industrial scale, and its unshakable efficiency and cost advantages, but also closely related to Saudi Arabia's policy of achieving 50% renewable energy generation by 2030 and net zero emissions by 2060.
Saudi Arabia launched the "Saudi Vision 2030" economic diversification blueprint in 2016, and subsequently proposed the "Green Saudi Initiative" and "Green Middle East Initiative" in 2021. Saudi Arabia has launched these plans with the aim of using green energy transformation as the main lever, increasing investment in the new energy sector, reducing the impact of fossil fuels, vigorously developing a green economy, and committing to achieving the goal of reducing 278 million tons of carbon emissions annually by 2030 and achieving net zero greenhouse gas emissions by 2060. Moreover, Saudi Arabia adapts to local conditions and regards solar and wind energy as key alternative products for achieving energy transformation. The globally renowned data analysis and consulting firm GlobalData reports that, at the current rate, Saudi Arabia's renewable energy generation capacity will grow at a compound annual growth rate of 40.1% between 2023 and 2030, reaching 31.5 gigawatts by 2030 and 63.1 gigawatts by 2035. And Saudi Arabia plans to increase the share of renewable energy generation in its total power generation from 3.2% in 2023 to 6.9% in 2030, and further increase it to 35.4% in 2035.
The compound annual growth rate of 40.1% is astonishing! Saudi Arabia will invest a huge amount of funds to achieve this goal. Saudi Arabia, which has long relied heavily on traditional fossil fuels, is an active embrace of energy transition. At the end of 2023, Saudi Arabia's Minister of Energy, Abdul Aziz, emphasized at the "2023 Saudi Smart Grid Conference" that the transformation goal was higher than GlobalData had anticipated. Saudi Arabia is preparing to develop renewable energy at a rate of 20 gigawatts per year, achieving an installed capacity of 130 gigawatts by 2030; Ready to export up to 150 gigawatts of green electricity or hydrogen; The government and private sector will implement over 80 measures to promote energy transition, with a total investment of over 188 billion US dollars. The Saudi Public Investment Fund, as one of the main investors in achieving Saudi Arabia's 2030 Vision goals, has invested over 70% of its assets in Saudi Arabia, driving the rapid development of the country's non oil economy. The Saudi Public Investment Fund is the second largest sovereign wealth fund in the Middle East and the fifth largest in the world, currently managing $925 billion in assets and achieving a profit of $36.8 billion in 2023. In addition, the Saudi Public Investment Fund holds nearly half of the shares of Saudi International Power and Water Company, and is the main investor behind several large photovoltaic power plants in Saudi Arabia.
From the different types of investments in Chinese new energy enterprises, Saudi Arabia not only focuses on the transformation of wind and solar power into new energy, but also values the large-scale transformation of new energy and its role in greening its desert. For example, Chinese listed company Trina Solar has partnered with Saudi Arabia to build the Jubail 3A seawater desalination project, actively developing the "hidden energy" of global deserts, and establishing Saudi Arabia's first photovoltaic seawater desalination project. As a famous "Desert Miracle Country", 70% of Saudi Arabia's drinking water comes from seawater desalination, which generates huge energy consumption that contradicts green development, making clean energy a top priority. The Jubail 3A seawater desalination project in Saudi Arabia uses reverse osmosis technology to desalinate seawater and utilizes photovoltaic green power to ensure energy supply. The daily water production reaches 600000 tons and can provide drinking water for 3 million people, which is of great significance for alleviating the growing water demand along the eastern coast of Saudi Arabia. In addition, green energy production is carried out on the photovoltaic panels, while the environment below the panels is cooled, shaded, and has low wind speeds, greatly improving the living conditions of plants in the desert and opening up a new possibility for ecological restoration. The specific operation is as follows: photovoltaic panels often need to be washed with water, and the used water naturally flows onto the sandy ground below the photovoltaic panels. At the same time, because photovoltaic panels use solar energy to generate electricity, patches of shade are formed under the panels, causing the surface soil temperature to decrease significantly compared to before, resulting in a decrease in soil evaporation. With frequent watering and a decrease in temperature and evaporation, many plants gradually grow under the photovoltaic panels, forming patches of green shade. Therefore, Chinese people came up with the method of raising cattle, sheep, and chickens under the photovoltaic panels. Cattle and sheep eat grass, control the height of grass, fix sand and green vegetation, and do not interfere with the normal power generation of photovoltaics. In order to increase the nutrients in sandy soil, Chinese people have a new idea of raising chickens directly under photovoltaic panels. In this way, chickens can plant grass and chicken manure can be returned to the field, and 300-360kg/acre of fertilizer can be applied to sand organisms every year. At present, this green and circular utilization model has been successfully implemented in the Kubuqi Desert in China, and has ultimately formed a new implementation model of "desertification control+power generation+planting+breeding+poverty alleviation". Even relevant personnel from the United Nations have exceeded expectations and believe that this is a good example worth learning from for the world.
The recent launch of intensive cooperation projects between Chinese companies and Saudi Arabia in the field of new energy is not just a coincidence of time, but also the alignment and implementation of strategic cooperation between China and Saudi Arabia. On July 11th, Chinese Minister of Commerce Wang Wentao held talks with visiting Saudi Arabia's head of economic cooperation with China, President of the Saudi Public Investment Fund, and Chairman of the Saudi National Oil Company, Rumayyan. Wang Wentao said that the Chinese side regards Saudi Arabia as an important partner in achieving Chinese path to modernization, and is willing to strengthen the docking of development strategies with Saudi Arabia, close trade and investment exchanges, deepen cooperation in infrastructure, energy resources, green development, digital economy and other fields in traditional, emerging and future fields, and work together to promote China Saudi Arabia's high-quality joint construction of the "the Belt and Road" to go deep and solid. Welcome Saudi enterprises such as the Saudi Public Investment Fund and Saudi Aramco to continue to root in China and share the dividends of China's development. Rumeyan said that Saudi Arabia attaches great importance to developing relations with China, supports the "the Belt and Road" initiative, and welcomes Chinese enterprises to actively participate in the construction of Saudi Arabia's "Vision 2030". The Saudi Public Investment Fund and Saudi Aramco are willing to further increase their investment in China.