The Saudi Ministry of Energy and NEOM signed on Sunday a memorandum of cooperation that constitutes the Saudi road map for the implementation of future energy goals as the Kingdom prepares to complete an integrated energy sector strategy by the end of 2020.
In a ceremony in Riyadh, Energy Minister Prince Abdulaziz bin Salman and NEOM CEO Nadhmi Al-Nasr signed the MoU that focuses particularly on renewable energy and includes increased cooperation in green hydrogen production, application of a circular carbon economy, enhanced local content, innovation and development, and the application of artificial intelligence in the energy sector.
The minister emphasized that the areas of cooperation embodied the Kingdom’s strategies and directions towards an increased reliance on renewable resources, such as solar and wind energy, to generate electricity, in addition to NEOM’s contribution to the production of hydrogen in order to achieve energy sustainability while preserving the environment and opening the way for exports.
“We have to persevere and make all our capacities available to realize this project,” he told a press conference at the ceremony.
He added that NEOM was part of Saudi Vision 2030, which aims to attract foreign investment and generate jobs to reduce the Kingdom’s dependence on oil.
According to the MoU, areas of cooperation between the Ministry of Energy and NEOM will include shaping the energy mix to produce electricity; supporting renewable energy projects; benefiting from the Saudi Energy Efficiency Center’s (SEEC) programs; promoting electrical grid projects and their infrastructure; and applying rules of the national program for local content in the energy sector.
“The Ministry of Energy will supervise the implementation of renewable energy projects within the NEOM project, which target the production of 15 gigawatts of electricity by 2030, in addition to carrying out all preparatory work, such as assessing and measuring renewable energy sources at the selected sites and evaluating the electric transmission network,” the minister explained.
He added that the Ministry of Energy would prepare all the necessary documents for launching renewable energy projects in NEOM, with the aim to attract leading local and international companies.
In this regard, Prince Abdulaziz noted that NEOM was characterized by an excellent geographical location and ideal climate conditions, which will facilitate the production of electricity from renewable energy and contribute to reducing the cost of hydrogen production.
The MoU will also cover cooperation in the programs of the SEEC, including exchange of experiences in the field of energy efficiency and rationalization of consumption, as well as the adoption of energy efficiency standards to be used in NEOM’s buildings and facilities.
Prince Abdulaziz affirmed that the agreement also sought the development and activation of artificial intelligence technologies, in its various forms, in order to better serve the business of generating and supplying energy and contribute to the development of a smart electricity network, through which energy is generated from various sources and distributed at a lower cost and higher efficiency.
He added that cooperation between the two sides also aimed to support and strengthen power network projects, including the design, construction and operation works in the Amala project, the hydrogen production plan, the electrical interconnection between Saudi Arabia and Egypt, in addition to studying the regulatory framework for electricity generation and cogeneration activities.
Addressing the press conference, Prince Abdulaziz talked about the National Program for Local Content in the Energy Sector, which he said sought to enhance and sustain local content in the energy business within NEOM.
According to the minister, the two sides will cooperate on the Hydrocarbon Demand Sustainability Program, focusing on raising the environmental and economic efficiency of these materials, in addition to promoting the use of blue and green hydrogen gas, which enhances the sustainability of oil demand.
The agreement also addressed the implementation of the circular carbon economy strategy, which, according to Prince Abdulaziz, relies on reducing emissions, reusing carbon, and using carbon as a feedstock for other products and finally decarbonizing. Relying on blue and green hydrogen represents one of the important initiatives under the circular carbon economy strategy.
Integrated energy strategy
In addition to being the largest oil exporter in the world, Saudi Arabia aspires to become one of the main countries in the production and export of renewable energy, according to the minister. This, of course, includes the production and export of hydrogen, he stated.
In this context, the NEOM’s new hydrogen project is a first step towards establishing an economically important activity within the Kingdom, which will contribute to enhancing growth, economic diversification and reducing greenhouse gas emissions.
For his part, NEOM CEO Al-Nasr emphasized the importance of the memorandum as it will reinforce and support NEOM’s plans to be the world leader in the full reliance on renewable energy. He stressed that the city would rely totally on renewable power, including solar, wind and hydrogen produced from renewable energy sources.
“Facing climate change requires more efforts and cooperation in the field of a circular carbon economy, to reduce emissions and make optimal use of carbon in the economic life cycle, including the great role of hydrogen in this context,” he said.
The Ministry of Energy’s cooperation activities with NEOM included coordination to study and support the strengthening of electrical grid projects and its infrastructure, as part of NEOM’s endeavor to build an advanced and modern electricity transmission network to link renewable energy sources in the company’s business area, cooperation in the field of smart grids and customer service.