The development of Saudi Arabia's renewable energy sector could lead to the creation of up to 750,000 jobs over the next decade, as the kingdom aims to derive 7 per cent of its total electricity output from renewables by 2030, according to a study.

Solar power is set to account for 77 per cent of all renewables added to the grid by 2030, with clean energy capacity poised to increase to 5.3 gigawatts over the same period, the US-Saudi Arabian Business Council said.

"In order to achieve its medium- to long-term renewable energy objectives, the kingdom must prioritise the sector within its budgetary planning and allow for continued foreign investment attraction,” the report led by the council's chief economist, Albara’a Alwazir, said.

"The level of ongoing investments in the sector is expected to create up to 750,000 jobs over the next 10 years, assuming renewables remain as a priority sector. Localising the manufacturing base will provide for most of the employment opportunities as the kingdom aims to localise the sector to 40-45 per cent by 2028 and beyond," it added.

Saudi Arabia, a founding member of Opec, is the world’s largest exporter of oil. The kingdom has moved away from burning fossil fuel to generate electricity and has prioritised developing renewable energy for power generation to free up more crude for export.

The kingdom’s energy ministry set up a Renewable Energy Project Development Office in 2018 in order to oversee the development of solar and wind projects.

It is pursuing an ambitious renewable power strategy and plans to add 60 gigawatts of clean energy capacity to the national grid by 2030. Of this, 40GW will come from solar photovoltaic plants, 16GW from wind turbines and 2.7GW from concentrated solar power, according to Saudi Arabia’s Ministry of Energy.

Earlier this year, Saudi Arabia launched the third round of its renewable energy programme, which aims to add a total of 1.2GW of solar photovoltaic power capacity to the grid.

The kingdom is also developing its first-ever wind scheme, a 400MW scheme in the Al Jouf region. The project, awarded to Abu Dhabi’s Masdar and EDF, reached financial close last year.

The US-Saudi Arabian Business Council, however, said the kingdom’s ambitious renewable energy programme could be delayed due to project cancellations stemming from the economic fallout from the coronavirus-pandemic.

"The negative effects of the pandemic on the renewable energy sector has caused delays in the selection of winning bids for round two of NREP’s [National Renewable Energy Programme] auctions. The final selection for round two was expected to occur in April 2020 but was delayed,” the council said.

Covid-19 is likely to postpone the completion timeline for projects tendered under the second renewables round by another year, provided the pandemic is brought under control.

Similarly, an 850MW IPP wind project that is part of the third round of NREP was expected to issue invitations to companies to pre-qualify for bidding to deliver the scheme in April.

"However, there have been no announcements regarding the entities that have been selected to the next round.

Saudi Arabia has so far allocated 270 billion Saudi riyals (Dh264.4bn) to help the private sector navigate economic challenges related to the pandemic.