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Saudi Arabia Speeds Up Efforts to Replace Liquid Fuels in Electricity Production

The two agreements will work on achieving the country’s targets to reach 50% of solar energy and other energy sources. (Asharq Al-Awsat)
The two agreements will work on achieving the country’s targets to reach 50% of solar energy and other energy sources. (Asharq Al-Awsat)
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Saudi Arabia Speeds Up Efforts to Replace Liquid Fuels in Electricity Production

The two agreements will work on achieving the country’s targets to reach 50% of solar energy and other energy sources. (Asharq Al-Awsat)
The two agreements will work on achieving the country’s targets to reach 50% of solar energy and other energy sources. (Asharq Al-Awsat)

As part of the Saudi government’s efforts to achieve global leadership and the optimal mix in the renewable energy sector, the Kingdom is making accelerated efforts to replace liquid fuels with gas and renewable energy sources in electricity production.

On Tuesday, the Saudi Power Procurement Company (SPPC) signed two agreements to purchase energy with a total capacity of 1,500 megawatts.

In September 2022, the Ministry of Energy completed all legal procedures to purchase the Saudi Electricity Company’s shares in the Saudi Energy Production Company, to be fully owned by the state, as part of comprehensive reforms aimed at achieving sustainability and raising the efficiency of the sector within the country.

In remarks to Asharq Al-Awsat, Dr. Mohammad Al-Sabban, former senior advisor to the Saudi Oil Minister, said that the Saudi Energy Production Company was implementing a road map within the framework of Vision 2030, to reach clean energy and achieve net-zero emissions by 2060.

Al-Sabban explained that the two agreements will work towards the country’s goals of reaching 50 percent of solar energy and other energy sources for power generation and water desalination.

The first agreement signed by the Saudi Power Procurement Company within the fourth phase of the National Renewable Energy Program included the purchase of energy for the Hanakiya solar photovoltaic project, with a total capacity of 1,100 megawatts, with an alliance of three companies: Masdar, EDF and Nesma.

This project will contribute to supplying approximately 190,000 residential units with electrical energy annually.

The company also concluded a power purchase agreement for the Tabarjal Solar Photovoltaic Project, with a total capacity of 400 MW, with an alliance led by three companies, namely, Jinko Power (HK) Company Limited, Sun Glare Holding Co. and Sunlight Energy Holding Co.

The project is expected to contribute to supplying approximately 75,000 residential units with renewable electrical energy per year.
 

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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.