The world's lowest-cost oil producer pictures a future based on the cheapest electrons, write Bachar Halabi and Nader Itayim
A decade into Crown Prince Mohammed bin Salman's Vision 2030 drive to diversify the economy through sweeping reforms and megaprojects, the rise of energy-intensive technologies and a new global economy is offering Saudi Arabia a reset.
The country, experiencing what could be likened to a new "1938 moment" — when oil was first discovered in Dammam — is racing to position itself as the world's most cost-competitive and reliable energy supplier. Speaking at the Future Investment Initiative (FII9) in Riyadh, energy minister Prince Abdulaziz bin Salman said Saudi Arabia now provides "the most efficient, reliable, and sustainable power on planet Earth", and invited global players to "invest with us".
The minister framed energy affordability and reliability as the backbone of global economic growth driven by artificial intelligence, data centres, critical minerals and advanced manufacturing. He described the "new global economy" as one increasingly defined by energy-intensive digital and industrial sectors whose expansion depends on secure and low-emission energy supply. "Without sustainable, reliable and dependable energy, we're finished as an economy," he said. That reliability, he insisted, is what Riyadh has built.
Saudi confidence stems from a domestic power sector model increasingly treated as an exportable framework. At its core is a "principal buyer" system under which a single entity procures fuels from Saudi Aramco, purchases power from generators, runs competitive tenders for both conventional and renewable projects, and sells to distributors. Combined with long-term central planning and early procurement, this has allowed the government to lock in low-cost generation equipment, avoid supply-chain bottlenecks and set record-low tariffs. "We bought all dual gas turbines from Siemens and GE through 2028," the minister said. "If we had delayed one year, none of this would be possible."
Solar projects such as Shuaiba (1.04¢/kWh) and Najran (1.09¢/kWh) rank as the world's first and second cheapest, while domestically produced gas sells at about $2.15/mn Btu, far below European and Asian benchmarks exceeding $12/mn Btu. Thermal generation costs are the lowest globally, while battery storage costs at $409/kW are the second cheapest, after China's $404/kW.
Earth, wind and solar
Saudi Arabia aims to expand renewable capacity to 64GW tendered by the year's end from 3GW in 2020. Some 12.3GW of renewable capacity is now connected to a grid the ministry aims to be 40pc automated by 2026, ahead of the 2030 target. Dawadmi wind farm (1.33¢/kWh) — for which a deal was signed this week with a consortium led by South Korea's Kepco and including the UAE's Etihad Water and Electricity — is the world's cheapest wind power source. And Saudi Arabia is converting or retiring 23GW of liquids-fired generation in favour of more efficient gas.
Beyond domestic generation, the minister said low-cost gas and renewables will anchor Saudi Arabia's push into clean hydrogen and synthetic fuels. He described both renewable and natural gas-based hydrogen as "clean" when coupled with carbon-capture projects led by state-controlled Aramco. Nuclear energy, including small modular reactors, remains a long-term option.
Abdulaziz's framing effectively recasts the energy transition as an economic opportunity rather than an environmental constraint, a narrative increasingly echoed by the UAE. A low-carbon pathway built on affordability, scale and reliability rather than forced phase-outs appears to be Riyadh's effort to define its stance ahead of the UN Cop 30 climate summit in Brazil. It wants its energy story told less through low-cost oil and more through bandwidth, and a bid to power the coming data-driven decades with the world's cheapest electrons.
