Saudi Arabia, in particular, has revealed ambitious plans to install enough solar power generation to create 10% of the country’s demand for electricity by 2020. If the Saudis have more of anything than oil, it’s sunshine, so the initiative makes a certain amount of sense.
But what is really driving the sudden interest in alternative fuel is the rising cost of oil and, very likely, a slowdown in OPEC’s ability to increase production. Saudi Arabia generates about 50% of its electricity from burning oil, using about 13% of the crude it produces. That 13% is far more valuable as an export than as a fuel for a power plant.
Some members also said they may start capturing the associated natural gas from their production wells. Currently the gas is simply flared off, as it has been for decades.
While OPEC’s plans for developing alternative energy sources should be welcomed, the real reason for the move has more to do with capturing more revenue from exported oil than it does with greening the planet.