China-Saudi relations are developing in the energy sector

China and Saudi Arabia have launched several groundbreaking projects with the shared goal of boosting their renewable energy efforts, which analysts say will pave the way for significant progress in renewable energy infrastructure and technology that will benefit both countries.

Sungrow Power Supply, a Chinese manufacturer of solar inverters, has signed a deal with Saudi Arabia’s Algihaz Holding for a 7.8-gigawatt-hour energy storage project — the world’s largest energy storage project. Solar inverters convert direct current to alternating current, which then flows into the electrical grid.

The project, which spans three sites, is scheduled to start in 2024, with full network capacity expected to be achieved by 2025, further enhancing the stability and reliability of Saudi Arabia’s power grid, Sungrow said in a statement.

In another project, JinkoSolar, the world’s largest solar panel manufacturer by shipments, has pressed ahead with overseas expansion plans to build the largest overseas N-type solar cell and module factory, partnering with Saudi Arabia’s Public Investment Fund. N-type solar cells feature higher efficiency and stability, and reduced degradation.

The investment of about $1 billion, JinkoSolar’s ​​largest overseas investment to date, is expected to provide an annual production capacity of 10 gigawatts of high-efficiency solar cells and modules once it is up and running, making it the largest production base for Chinese photovoltaic products overseas, the company said.

In addition, TCL Zhonghuan Renewable Energy Technology Co. announced a joint venture, also with the Saudi Public Investment Fund, to build a plant to produce 20 GW of photovoltaic crystal wafers, which serve as semiconductors. With a total investment of about $2.08 billion, the plant will further strengthen renewable energy cooperation between China and Saudi Arabia, TCL Zhonghuan said.

Analysts said they believe these initiatives underscore win-win cooperation between China and Saudi Arabia and constitute a strategic alliance focused on mutual benefits and sustainable development. The projects will leverage the strengths and resources of both countries while establishing a model for international cooperation in combating climate change, they said.

Nicholas Lua, an analyst at global consulting firm Rystad Energy who focuses on the solar supply chain, said: “These gigawatt-scale announcements have the potential to accelerate Saudi Arabia’s domestic solar power production, enabling the country to tap into the Middle East’s unique solar energy potential of more than 2,000 kilowatt-hours per square metre of solar irradiance per year.”

He added that solar panel production in Saudi Arabia and other Middle Eastern countries could further expand the presence of Chinese solar energy companies on the international stage.

Luo Zuoxian, an analyst at Sinopec Economics and Development Research Institute, said the projects would further diversify Saudi Arabia’s energy sources and enhance the stability and reliability of the local power grid thanks to the advanced technology and expertise of Chinese companies.

On the other hand, these projects will also be an excellent opportunity to expand China’s share of renewable energy and showcase China’s technological achievements in the international arena, he added.

Luo said he believes the successful implementation of the projects will not only strengthen China’s renewable energy industry but also strengthen economic ties with Saudi Arabia, resulting in a long-term strategic partnership.

The deepening renewable energy cooperation between China and Saudi Arabia is an example of a strategic alliance focused on sustainable development, he said. By leveraging their strengths and resources, the two nations are poised to make significant progress in renewable energy, setting a benchmark for international cooperation in the fight against climate change, he added.

Li Xiande, president of JinkoSolar, said the partnership with Saudi Arabia is another important milestone in the company’s globalization strategy and will help it optimize its global production and marketing infrastructure and enhance global competitiveness.

Qian Jing, vice president of JinkoSolar, said the Saudi Arabian factory will be the company’s fourth overseas plant, following those in Malaysia, Vietnam and the United States.

Middle Eastern countries enjoy good creditworthiness, sufficient financial resources, stable conditions, ambitious market and political support, Qian said.

“China and the global market continue to show increasing prospects for clean energy demand, which is driving major players in the photovoltaic industry to further expand high-efficiency capacity in the long term,” she added.

Qian said energy storage will be the company’s second most important business after photovoltaic module production. JinkoSolar aims to become the world’s leading company in energy storage in the next three to five years.