Saudi Arabia’s Solar City Disaster | OilPrice.com
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We’ve talked about the Saudi Crown Prince’s massive ego trip project before. It’s NEOM, and the first phase of the project, which cost $8 billion, is complete. The entire project has now been documented in a 2,300-page report detailed by the WSJ.
The entire futuristic city-state project will cost the Crown Prince $500 billion as he seeks to turn this huge piece of desert into the best city in the world. That would mean extreme automation (think: flying taxis, robot maids, glow-in-the-dark beaches, cloud seeding for rain, hologram schools, an artificial moon), around-the-clock surveillance .... and anything else the Crown Prince thinks would attract the wealthiest of the wealthy.
The entire city is meant to be powered entirely by solar and wind energy.
With $492 billion to go, there is every reason to be skeptical.
The NEOM solar project reflects an amount of electricity that is at least 10 times more than what Saudi Arabia needs. And it’s not likely to attract foreign investment because there are no quantifiable investment criteria. Their only real chance is attracting Chinese money because it would be akin to buying diplomacy, which does not hinge on normal investment criteria.
Further, such a large-scale solar project in the desert will face major challenges beyond the financial. On a technical level, the desert sand built up will be extreme and require manual cleaning of panels, while sophisticated electronics will face continual breakdown in this climate.
Recently, the Saudi sovereign wealth fund benefitted from the sale of shares of Sabic to Aramco (a forced sale that made no sense for Aramco). That money will be plowed into NEOM and represents around $70 billion.
That, then, brings the necessary investment to $78 billion, in the best-case scenario, leaving MBS about $420 billion shy of his desert city audacity.