Saudi Arabia currently controls a fifth of the world’s oil reserves. The kingdom is aiming to proceed with both nuclear energy projects as well as those focusing on renewable energy in order to reduce the amount of natural gas and crude the Saudis burn for electricity generation by half.
Saudi Arabia is forecasting that domestic power demand will be triple in the next twenty years. The kingdom needs to develop sustainable sources of energy, according to the VP for renewable energy in King Abdullah City for Atomic and Renewable Energy, Khalid Al Sulaiman. Al Sulaiman spoke in Riyadh at a recent conference.
King Abdullah City is heading up the development of green energy. The agency’s vice president noted that the kingdom’s demand for petroleum and related products, including energy, is increasing at an alarmingly high rate. Speaking at the Saudi Solar Forum, Al Sulaiman said that many factors are driving that demand, including growth in the population, healthy economic development and many others. Currently Saudi Arabia uses fossil fuels to generate nearly all of the kingdom’s necessary energy.
Oil producers in the Gulf are searching for new power generation methods, due to their preference for exporting the costly crude and maximizing revenues while marking the natural gas for making petrochemicals. Al Sulaiman stated that energy generated by sources other than fossil fuels like oil and gas might account for over half of Saudi’s supply in the next two decades.
Wind and solar power are considered sources of the future, as are nuclear plants, based on plans that await government approval before becoming official policy. Expanding into renewable energy and nuclear generation is part of the $100 billion in spending targeted to help meet the forecasted hike in demand and help reduce the kingdom’s dependence on crude, according to recent statements made by government officials in Abu Dhabi.
Saudi is the largest oil producer in OPEC. The kingdom does not have the gas capacity to cover the necessary power generation and still supply industries. Therefore they rely on crude and other refined products at the power stations. Around half of the power generated today is due to liquid fuels with gas looking after the balance, according to Saudi Electricity Co., the government-run utility firm.
Generation capacity in Saudi Arabia sits at around 45,000 megawatts and Saudi Electricity says that demand for power reaches that level in peak periods. Al Sulaiman expects that the demand will be triple that amount by 2030. It was stated back on November 30 by Khalid Al Senani, the Petroleum and Mineral Resources Ministry’s supply director that the kingdom burns the equivalent of about 800,000 barrels of oil each day in order to satisfy the domestic demand.
After King Abdullah bin Abdulaziz, the Custodian of the Two Holy Mosques, ordered that additional citizen benefits worth $103 billion be put in place, economist such as Banque Saudi Fransi’s John Sfakianakis stated that the kingdom’s breakeven oil price could reach $85 per barrel. This is the price Saudi Arabia is required to sell crude at in order to finance the government’s spending.
Sfakianakis noted that Saudi Arabia must move into renewable energy – it is not optional or a luxury. The oil that Saudi has must be used for exports in order to meet the needs of the swelling population, as opposed to using the crude domestically.
Saudi regards solar power and other sources of generation beyond hydrocarbons as essential to increase power by 50 percent in the next decade, according to recent statements made by the Electricity and Co-Generation Regulatory Authority’s governor Abdullah Al Shehri.
Based on forecasts for consumption the chief executive officer of Saudi Aramco, Khalid Al Falih, issued warnings last year that the daily energy demand in the kingdom will be over double, going from 3.4 million barrels of oil equivalents in 2009 to 8.3 millions barrels in 2028.
Expanding the generation capacity and transmission grid will mean that the kingdom invest over $100 billion in the next decade, according to the electricity authority’s Al Shehri. One third of those investments will be made into the construction of power plants, which includes renewable energy sources, stated Al Shehri.
The current capacity should rise to hit 75,000 megawatts in 2018 and by 2030 Al Shehri said that amount should be over 120,000 megawatts. Back in February Saudi Arabia entered into agreements with France to develop nuclear energy and a February 22 announcement was made regarding the kingdom’s use of wind, solar and geothermal power.Andrew Reid, Staff Writer, Gulf Jobs Market News