Key facts
- Saudi Arabia plans to displace over 1 million barrels per day of liquid fuel consumption by 2030.
- Natural gas and renewables are the primary focus for replacing liquid fuels in power generation.
- A 30-year civil nuclear cooperation agreement was signed between the U.S. and Saudi Arabia on July 22.
- The kingdom is planning its first commercial nuclear plant at Duwaiheen with two pressurized-water reactors.
- Nuclear power is considered a competitive source of firm, low-carbon electricity, potentially displacing significant oil use.
Saudi Arabia is embarking on a significant energy transition, aiming to displace over 1 million barrels per day of liquid fuel consumption by 2030. The kingdom plans to achieve this through a combination of natural gas and renewable energy sources, with nuclear power emerging as a potential long-term solution for growing electricity demand.
The recent signing of a 30-year civil nuclear cooperation agreement with the United States on July 22 opens the door for U.S. companies to supply reactors, nuclear materials, and technical services to Saudi Arabia. This move aligns with the kingdom's search for additional generating capacity, as its electricity demand is projected to grow by an average of 3.1% annually through 2030.
Saudi Arabia's domestic consumption of oil for power generation, particularly during peak summer months, is substantial. In June 2024, combined oil burn reached 1.42 million b/d, though it significantly decreased in early 2025. Reducing this reliance on oil-fired generation would free up more petroleum for export or other uses.
Aramco is central to the gas strategy, with the Jafurah unconventional gas field beginning production in December 2025 to boost sales-gas capacity. Concurrently, Saudi Arabia is targeting an ambitious 130 GW of renewable capacity by 2030. These initiatives are designed to replace liquid fuels in power generation as part of the broader Liquid Fuel Displacement Program.
The kingdom's first proposed commercial nuclear plant is slated for Duwaiheen, with the regulator having granted a site-preparation license for two pressurized-water reactors, each with a capacity of approximately 1.4 GWe. While no vendor has been selected, the plant's potential 2.8 GW nameplate capacity could generate about 22 TWh annually, equivalent to displacing roughly 105,000 b/d of crude oil if it replaces oil-fired generation.
Despite having vast solar capabilities, the case for nuclear power in Saudi Arabia rests on its ability to provide firm, reliable electricity when solar generation is unavailable. A study suggests nuclear power could be a competitive source of firm, low-carbon electricity at approximately $60/MWh, about 30% less than solar paired with batteries for a similar reliability level.
However, the path to nuclear power involves geopolitical hurdles. The U.S. agreement faces a 90-day congressional review period. A key political question remains regarding President Trump's insistence on Saudi Arabia establishing diplomatic relations with Israel, a condition whose inclusion in the submitted agreement is unclear.