Monday, July 13, 2015

How do countries like Saudi Arabia and other major oil exporters react to solar and other renewable energy technologies?

Ah, the tough stuff. The economies of many major oil exporters are understandably dependent on oil exports. Consequently, the widespread adoption of other non-oil-dependent technologies would be disruptive to their economies. Therefore, it is generally not in their best interests to upset the energy status quo. At the same time, each year, it becomes more and more difficult to reach new petroleum reserves at a reasonable cost. Countries like Saudi Arabia heavily subsidize their domestic oil consumption. Saudi Arabia earns an additional ~$55/barrel if they export rather than if they consume the oil domestically. By developing renewable energy technologies like solar, there is more oil to export and they can be better situated, long-term, when oil reserves become more depleted or difficult to access. They would remain a leading energy exporter.
The European Commission's Joint Research Centre, Institute for Environment and Sustainability

In other oil-producing countries where sunlight is in somewhat shorter supply (eg. Russia), solar is still in the mix, but other technologies are also being developed more rigorously. In 2008, Russian President Dmitry Medvedev (current prime minister) mandated that his country raise the fraction of energy from non-hydropower renewable sources to at least 4.5 % of the total by 2020. Overall, they have adopted an all of the above strategy in recent years (starting ~2008) and different technologies will definitely be more cost effective in different parts of the country. Russia produces large amounts of hydroelectric power and has tapped many geothermal energy sites. Currently, 15 % of the country's energy production is from these large hydroelectric sources and hydropower is well-established. However, there has been anew push to install small and micro hydro energy. The Kamchatka region is rich in geothermal energy, making it the third most common energy source. However, because of fuel subsidies and the considerable social unrest that would be unleashed if these subsidies were lifted, the rate of adoption of renewable technologies has been slow.

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