Saudi Arabia is known as one of the major oil producers of the world, so it may seem slightly surprising that it has now initiated a drive towards renewables. In fact, the country has planned to commit to green energy in the long term, suggesting that it is seeking to get most of its energy from cleaner sources in the future. Here is some further information on Saudi Arabia’s green energy.
This new surge in interest from Saudi Arabia is likely a result of growing concerns about climate change globally, with the majority of other first world countries also shifting their focus to investment in green energy.
The kingdom is eager to shift its economy away from oil, as it is, after all, a non-renewable energy source which will one day run out. It is also likely to become less popular among investors, especially with the rise of ethical investment, which disregards investment in sources which are harmful to the environment/people.
Some of the main sources of green energy for the country are likely to be wind and solar, which are two of the most popular forms of renewable energy across the planet. Investors may be keen to invest in shares of companies like these, whether directly through stocks and shares or through alternative means, such as CFDs as they are proven to be an effective energy source capable of providing ample power to countries using them.
The oil and gas sector is responsible for nearly half of Saudi Arabia’s GDP. Any dips in oil prices (which have been occurring frequently due to global oversupply) are sure to prove harmful to their economy.
The slump in oil prices in recent years (dropping from above $100 to below $50) has seriously damaged Saudi Arabia’s economy and growth prospects, and they have been forced to use up a lot of their financial reserves. This means that financing their renewable energy project may prove difficult.
This may also put investors off from getting behind the government’s plans, as they may lack confidence in their ability to deliver. If this is the case, then Saudi Arabia may face difficulties in creating a sustained green energy scene in the country.
Ultimately, the move to green energy is probably the right one for Saudi Arabia, but some may feel that it has come at a difficult time for the country. It will be difficult to the country to move away from an oil dependent if it fails to properly fund green energy, so it could well prove to be an expensive (yet worthy) venture overall.