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Saudi Arabia seeking alternatives for green future

Global Arab Network - Click HERE for more: Green Energy - Solar, Wind, Wave, Tidal and Hydropower

Friday, 29 October 2010 13:34

Although Saudi Arabia has the world’s largest proven reserves of oil, the government is looking to develop alternative energy sources to fuel the nation’s power plants amid rising demand for electricity, reports Global Arab Network according to OBG.

Due in part to the growing needs of an expanding industrial base and population, electricity demand is currently rising by around 8% a year. Oil-burning plants produce most of the country’s power, with more than 1m barrels per day being consumed representing some 10% of daily production.

Moreover, as oil is sold to the power industry at around 5% of the international market rate, the cost of subsidising domestic electricity production is considerable. According to official figures, government subsidies for power consumption amounting to approximately $13.3bn per year, the equivalent of 9% of government expenditures in 2009.

By reducing its reliance on oil for power generation, Saudi Arabia could free up resources for its export market. With fossil fuel sales expected to underpin the economy for the foreseeable future, the government wants to make the most of existing reserves.

Dr Adil Bushnak, the owner of several Saudi desalination and water distribution companies, has warned there could be a real impact on the country’s key revenue generator if it does not find another way to fuel electricity generators, especially if demand continues to increase.

“If we continue our current consumption, we will be using 50% of our [oil] production inside the country in the future,” Bushnak said at the Saudi Water and Power Forum held in Jeddah on October 2.

Central to the Kingdom’s future energy strategy is the development of a civilian nuclear power industry, with feasibility studies being carried out through the newly established King Abdullah City for Atomic and Renewable Energy (KACARE), located on the outskirts of Riyadh.

KACARE will serve as a centre to promote energy research and oversee project development. While there are limited details on the city’s opening date, a president and other officials have already been appointed.

In June, KACARE awarded a contract to Pöyry, a Finnish engineering and consulting firm, to help draft a long-term strategy for the development of alternative energy sources. Pöyry’s work will include advising the Kingdom on the type of regulatory bodies that might be necessary, as well as identifying the international treaties that would need to be observed.

The Saudi Arabian government also approved plans for civil nuclear cooperation with Russia, the state-run Saudi Press Agency reported in late October. The draft agreement was signed by the head of the Kingdom’s Center for Nuclear and Alternative Energy Technologies, Hashim Abdullah Yamani.

Although Saudi Arabia should have few problems in gaining the approval of international agencies and the support of countries such as the US, the path to a successful nuclear energy programme can be long. It may take time to design and construct specialised power stations adapted to Saudi Arabia’s own needs and climate.

While the nuclear option does appear the preferred choice, the country is considering alternatives. Not surprisingly, solar energy is one. With a sunny climate and vast open spaces, Saudi Arabia may appear to be a likely candidate for this renewable energy source.

In late October, California-based SolFocus announced it had reached a deal with the Kingdom’s Vision Electro Mechanical signed an agreement to build eight solar power stations in the Kingdom, starting with a 130-kilowatt solar plant in the Bahra industrial complex near Jeddah.

There are a few issues that must be addressed before any larger scale solar energy developments can be built. Potential problems include excessive dust, humidity and even heat, all of which can damage solar panels and equipment.

Meanwhile, to address rising levels of electricity consumption, Saudi Electricity Company (SEC), the state-controlled utility, plans to increase generation capacity from 50,000 MW to 70,000 MW by 2020, at a cost of approximately $80bn.This expansion appears to be focused on conventional power stations, rather than alternative sources of energy, however, going forward, alternative sources may well be tapped sooner rather than later.

Global Arab Network

This article is published in partnership with Oxford Business Group

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