Saudi officially plans to phase out power plant liquids-burn. But, with much of the country not connected to gas pipelines, oil-burn is here to stay. The kingdom has more oil-fired capacity under construction than the rest of the world put together.

Saudi Arabia is advancing a power generation strategy with considerable internal inconsistencies. On the one hand, Energy Minister Khalid al-Falih says “liquids burning in our utilities will be virtually eliminated” over the next...