KSA Local Manufacturing Potential

The rapid growth in power supply, the increasing reliance on renewable energy, and the emphasis on the implementation of energy efficiency technologies, provide an economic opportunity for Saudi Arabia in the field of local manufacturing of power supply technologies as well energy efficiency materials and instruments. Accordingly, this project produces a detailed assessment of the local manufacturing potential for selected conventional and renewable power generation as well as transmission technologies and energy efficiency material and instruments. The following technologies are assessed in the project: open and combined cycle gas turbines, and steam turbines, Concentrated Solar Power (CSP), photovoltaic modules and related key system components, major transmission and distribution grid components (i.e. cables, towers and converter stations), thermal insulation components for buildings, energy efficient windows (insulated glazing, reflective coatings, heat-absorbing tints), room air conditioners, and Solar Water Heaters (SHW). Together with the project partners Ernst & Young and Fraunhofer ISI, the project aims to assess the competitive positioning and potential of Saudi companies in the manufacturing of key components of the above mentioned technologies.

The analysis includes a screening of technologies with regard to the suitability for local manufacturing on component level. The following market drivers are identified as important:

• Market size in Saudi Arabia: Only technologies that have a minimum market size will have sufficient potential to attract companies to build up manufacturing capacity for individual components in Saudi Arabia.
• Degree of industrial integration
• Barriers for new entrants in the value chain (i.e. technology intensity, etc.)

Reviewing past and current renewable energy and energy efficiency projects in the region will help to identify Saudi Arabian companies which are already active in energy component manufacturing and capable of supplying relevant services like e.g. operation and maintenance or project development.

The value chain analysis relies on in-depth experience with sector analysis in the renewable energy and energy efficiency sectors. This analysis uses data collected in interviews with national and international companies in the field of energy technologies and from interviews with industry professionals from the relevant sectors. Based on the interview analysis, the project focuses on idendifying the industries in KSA which have the potential to become in the short or medium term potential contributors to the selected energy technologies’ value chains. This identification is  based on the consortium’s expertise in assessing local potential in a number of developing countries.

In June 2015, a stakeholder workshop in Riyadh took place with participation of the Saudi Electricity Company, Saudi Arabia Ministry of Petroleum and Mineral Resources, and others.