As an initial step to set up small-scale solar power facilities next year, the two partners will build pilot plants in Saudi Arabia using solar cells made by Showa Shell’s wholly owned subsidiary Showa Shell Solar K.K., the Tokyo-based firm said in a statement.
Based on the result of the tests and verifications, the project will proceed to a full-scale commercialization phase in Saudi Arabia, Showa Shell said.
Saudi Arabia has recently announced its determination to diversify its economic basis in which they cited solar energy as one of the core areas of development for the future, said Showa Shell.
According to Japan’s Nikkei business daily, Showa Shell and Saudi Aramco intend to choose several sites in Saudi Arabia for constructing power plants capable of generating 1,000kw to 2,000kw.
Each facility is to supply electricity to some 200-400 buildings, such as homes and schools. Output of these plants is expected to total about 10,000kw, and the total cost is estimated at several billion Japanese yen, the newspaper said.
Once the project gets on track, Showa Shell and Saudi Aramco plan to establish a joint venture around 2012 for similar operations in emerging countries in the Middle East, Southeast Asia, Africa, Latin America, and elsewhere, the report said.
Demand for solar power facilities is thus believed to be strong in fast-growing regional cities of emerging countries.
The capitalization and stakes to be held in this joint venture are to be decided later.
Since 2004, the Shell Group gradually transferred approximately 15 percent of its holdings in Showa Shell to Saudi Aramco, which currently holds approximately 15 percent of Showa Shell.