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article imageChina and Saudi Arabia solar investments reshaping geopolitics

By Karen Graham     Feb 5, 2019 in World
Riyadh - Uneasy about its oil dependence and lack of domestic manufacturing capabilities, Saudi Arabia is courting China for help with the next stage of its energy policy, amid predictions that renewable energy generation will change modern geopolitics.
Just last month, two Chinese solar companies unveiled plans for large-scale solar manufacturing infrastructure in Saudi Arabia. The world's fourth largest PV maker, Longi is planning a $2 billion Saudi Arabia-based solar panel back sheet production plant in partnership with the South Korean firm OCI.
Additionally, the world’s largest thin-film PV manufacturer, Hong Kong-listed Hanergy, announced it would be investing more than $1 billion in a fabrication center to meet Saudi solar demand.
According to GreenTech Media, a feasibility study on the Longi project is expected to be completed by mid-2019, Tariq Baksh, vice president of the chemicals and renewables program at Saudi Arabia’s National Industrial Clusters Program, said.
Saudi Crown Prince Mohammed bin Salman has unveiled plans to develop the globe's biggest solar ...
Saudi Crown Prince Mohammed bin Salman has unveiled plans to develop the globe's biggest solar power project for $200 billion in partnership with Japan's SoftBank group
Actually, according to Axios, LONGi signed an agreement with Saudi trading company El Seif Group to establish the large-scale solar manufacturing infrastructure in Saudi Arabia last May, just a few months after President Donald Trump levied tariffs on imports of Chinese solar panels and cells.
Looking at the bigger picture
Many Mideast countries have been dependent on their oil reserves while lacking any large degree of manufacturing capabilities. Saudi Arabia is but one of those countries, but they have shown a great deal of interest in renewables, so much so that they have courted China to help with their growing green initiatives.
Saudi Arabia is working toward becoming a global trade hub as part of its ambitious Vision 2030 plan, announced in April 2016. As part of the plan, the country would reduce its dependence on oil, diversify its economy and develop public service sectors such as health, education, infrastructure, recreation and tourism.
By implementing such reforms, some experts would say Saudi Arabia has put itself in a difficult position. Riyadh may have to choose between China, the largest solar manufacturer in the world — along with almost 80 projects under the Vision 2030 plan — and its most important geopolitical ally, the U.S.
Axios writes: the bottom line to this conundrum is that "Saudi Arabia has the opportunity to capitalize on the trade conflict to further its development goals, but must choose its partners carefully to avoid becoming collateral damage."
The geopolitics of the new age of energy
For decades, fossil fuels, primarily oil and natural gas, have driven and played a pivotal role in global geopolitics. But lately, the balance is shifting due to the rapid growth of decentralized, emissions-free, renewable energy resources. On the one hand, we have rapidly decreasing costs of renewable energy resources, battery energy storage and digital smart grid technology.
At the other end of the balance, we have continuing volatility in oil and fossil fuel prices, and a dependence on fossil fuels militarily and for national security.
An oil facility in Haradh  eastern Saudi Arabia
An oil facility in Haradh, eastern Saudi Arabia
“The new energy age will reshape relations between states and regions bringing ‘A New World’ of power, security, energy independence and prosperity,” according to the Global Commission on the Geopolitics of Energy Transformation.
“The geopolitical and socioeconomic consequences of a new energy age may be as profound as those which accompanied the shift from biomass to fossil fuels two centuries ago. These include changes in the relative position of states, the emergence of new energy leaders, more diverse energy actors, changed trade relationships and the emergence of new alliances."
As the report explains, shifting from one source of energy to another also involves a much deeper transformation of the planet's energy systems — a transformation that will have social, economic and political implications which go well beyond the energy sector.
It will be particularly evident in countries where fossil fuels, like coal, are still a major source of energy, such as the U.S., China, Russia and a number of European countries. China and the U.S. still rely heavily on coal production, and doing away with coal to mitigate climate change will also cause the two countries to lose an old political advantage.
More about Saudi arabia, China, Solar energy, Geopolitics, United States
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