Download report
All markets

Saudi Arabia

With a cumulative score of 1.47, Saudi Arabia ranks number 54 among emerging markets and number 83 in the global ranking.

  • Emerging markets
  • Middle East & Africa

1.76 / 5

Power score

0.80 / 5

Transport score


Buildings score

Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.


Low-carbon strategy

Net-zero goal and strategy

Saudi Arabia pledged to reach net-zero emissions by 2060 in October 2021. However, this target has yet to be written into law, and is not backed by a clear roadmap to achieve the required emission cuts. Plans for tackling hard-to-abate sectors are fuzzy beyond planting trees and relying on carbon capture.

Nationally Determined Contributions (NDC)

Saudi Arabia combined its announcement of a net-zero target with an updated NDC. Where the previous document lacked a baseline against which to measure emission reductions, the new plan provides a quantifiable objective.

Fossil fuel phase-out policy

Saudi Arabia has been active in opposing pledges to phase out fossil fuel subsidies during international climate talks. Fossil fuel producers have access to both subsidized natural gas and oil. This will remain the case over the coming years - 2025 is set as the date for many of these subsidies to be removed, but whether they will affect fuel used by the power sector (and not be delayed) remains to be seen.


Power policy

Saudi Arabia upped its renewables targets in early 2019 – the kingdom is now targeting 58.7GW of renewables capacity by 2030. The target is broken down into technology-specific chunks, the largest of which is 40GW of PV. It is unlikely that the government will meet an interim target of 27.3GW of renewables by 2023 – the objective no longer features in official announcements. The country’s renewables sector has had a few false starts, but recent activity signals progress. As of October 2020, some 3.4GW of solar and wind capacity had been auctioned through the country’s main auction program, REPDO. The national sovereign wealth fund is also playing a central role in procuring clean capacity, albeit through a framework that is somewhat opaque than REPDO. For its part, small-scale solar is likely to be buoyed by the publication of a new net-metering framework in July 2020, and additional measures to train installers and facilitate installations announced in February 2021.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

As with other countries in the region, Saudi Arabia has seen record low bids over recent years. These include a $21.30/MWh levelized bid in January 2019 for Dumat al-Jandal, the country’s first auctioned wind farm. Meanwhile, falling equipment costs, free land, zero connection costs and cheap labor have made PV the most competitive source of new bulk generation. Saudi Arabia is moreover committing to an ambitious subsidy-removal program, stripping away measures keeping down the price of natural gas and oil. Although it looks like subsidies for generation fuel will remain in place for now, retail power prices are being increased for all customer types. Such efforts are aligned with Saudi Vision 2030, which aims to diversify the economy away from oil while increasing the role of the private sector.


Power market

Gas generation plays an important role in the country’s east, while western regions rely on burning oil for power. Plans exist to convert western oil plants to gas, although progress in this area is lagging. Renewables additions have increased substantially in recent years from a low base – capacity awarded through Rounds 2 and 3 of the REPDO auction program suggest that this will continue. However, investors may be deterred by a lack of visibility on future procurement schemes. The country’s partially unbundled power sector remains dominated by the state utility, and private-to-private power purchase agreements are not yet explicitly allowed. Contracts signed with renewables developers are take-or-pay, guaranteeing that power be purchased regardless of demand.

Installed Capacity (in MW)

20122014201620182020020K40K60K80K100K MW

Electricity Generation (in GWh)

201220142016201820200100K200K300K400K GWh

Utility privatisation

Which segments of the power sector are open to private participation?


Wholesale power market

Does the country have a wholesale power market?

Not available

Doing business and barriers

Peak electricity demand has grown steadily, rising from 46GW to 61GW over 2010-20. Growth is likely to resume despite the economic impact of the pandemic. Besides the conversion of western oil plants to gas, policymakers are mulling the relative benefits of using domestic gas resources versus liquefied natural gas, terminals for which have yet to be built. In the long run, world-beating renewables resources are likely to undercut such investments. Moreover, the amount of power used by desalination processes is likely to reduce as the country switches from existing thermal plants to installations employing reverse osmosis.

Currency of PPAs

Are PPAs signed in or indexed to U.S. Dollars or Euro?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Fossil fuel subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?

Not available

Fossil fuel taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes?

Not available


EV market

The government had in fact banned EVs from being imported into Saudi Arabia for commercial use (personal use was allowed) in 2017; this was only lifted in August 2021. However, the government is one of the only oil producers in the region to implement corporate average fuel economy standards, although these are not ambitious enough to stimulate EV uptake. Low fuel prices hurt the competitiveness of EVs against fossil fuel cars, but these are being gradually raised in line with the government’s reform program.

EV policy

The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?

Not available


Buildings market

A Saudi Energy Efficiency Program was kicked off in 2012, and oversees the implementation of standards and other measures. Saudi Arabia already introduced stronger efficiency requirements for new builds in 2010. Initiatives to decarbonize the building sector include the High Efficiency Air Conditioning initiative, which provides a 900 riyal ($240) rebate for up to six high-efficiency unit purchases per household.

Energy performance standards

Are there minimum energy performance standards for buildings?

Not available

Energy efficiency plan

Does the country have a national energy efficiency plan?

Not available

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heating market remains at an early stage.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

Additional insights
from BNEF

Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.

Read more

Powered by

Climatescope 2021

Energy Transition Factbook

This marks the 10th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. For the first time, the project has expanded its scope to include activity not just in clean power but in the decarbonization of the transportation and buildings sectors.

Read the reportSee all reports

Stay up to date

Subscribe to our mailing list to get the latest news about Climatescope directly in your inbox.


© 2023 Climatescope. View license and Privacy policy