Energy sector in Saudi Arabia and Bahrain
Saudi Arabia is one of the largest producers and exporters of oil and natural gas in the world, which makes the energy sector a central economic driver. To reduce dependence on these finite resources and to position itself strategically in the growing world market for renewable energies, Saudi Arabia is focusing on renewable energies (RE) such as solar, CSP, wind power technologies, and hydrogen. Saudi Arabia has already built several solar and wind power plant and is currently working on building the world's largest hydrogen production plant in NEOM. Also, in neighboring Bahrain, the expansion of renewable energy plays a key role in the economy's efforts to diversify.
Energy sector in Saudi Arabia
Saudi Arabia is responsible for about 20% of global oil production and has the largest proven oil reserves in the world. The oil industry is the most important in Saudi Arabia and contributes a significant part to the country's gross domestic product. Oil and gas revenues build the majority of export earnings.
Saudi Arabia has taken several initiatives in recent years to diversify the energy sector and promote renewable energy sources. In 2019, the country announced the construction of multiple solar and wind power plants that are expected to provide a total of 60 gigawatts of renewable energy by 2030. Saudi Arabia also plans to build nuclear power plants to reduce its dependence on fossil fuels and ensure a clean energy supply.
In addition to wind and solar power, Saudi Arabia is building up its capacities in the field of hydrogen production. The Saudi Aramco company has been exporting blue hydrogen since 2020 and is aiming to produce green hydrogen in the long term. In NEOM, the largest mega-project under Vision 2030, Saudi Arabia is building the world's largest hydrogen plant.
In addition to promoting renewable energy, Saudi Arabia has also taken steps to make its oil and gas production more efficient and environmentally friendly. The country has invested in cutting-edge technologies such as Carbon Capture Technologies to reduce the oil industry's carbon footprint. The kingdom has also announced plans to modernize and privatize its oil and gas industry to make it more competitive and attract new investment.
Energy sector in Bahrain
Bahrain is a small but energy-intensive country that focuses on oil and gas exports to boost its economy. The energy sector is the country's largest industry, accounting for about 80% of GDP. As early as the 1970s and 1980s, the kingdom tried to diversify its economy and established itself as a leading regional financial center. With Vision 2030, the kingdom has been in an economic and social transformation process for years, which aims to further diversify the economy. Like Saudi Arabia, Bahrain aims to reduce long-term dependence on crude oil and gas.
The oil and gas industry drives national economic development in the country, which is a member of the Organization of the Petroleum Exporting Countries (OPEC). In recent years, Bahrain has taken initiatives to reduce its dependency on oil and gas and to accelerate the expansion of renewable energy. In 2017, Bahrain announced plans to build a 100-megawatt solar power plant that would provide about 5% of the country's electricity needs.