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Saudi Arabia Looks to Solar, Nuclear Power to Reduce Its Oil Use by Half
The country expects domestic power demand to triple over the next two decades and wants to develop a more sustainable mixture of energy sources, Khalid Al Sulaiman, vice president for renewable energy at King Abdullah City for Atomic and Renewable Energy, said at a conference in Riyadh today. King Abdullah City is the agency in charge of developing green energy.
“Saudi Arabia’s demand for petroleum products -- demand for energy -- is rising at a high and very alarming rate,” Al Sulaiman said in a speech at the Saudi Solar Forum. “Population growth and robust economic development and many reasons drive that demand.” The country currently gets almost all of its energy from fossil fuels, he said.
Persian Gulf oil producers are seeking new ways to generate power because they prefer exporting valuable crude to maximize income and allocating natural gas to make petrochemicals. Energy other than oil, gas and other fossil fuels may account for more than half of the kingdom’s supply by 2030, Al Sulaiman said.
Future sources will include solar and wind power as well as nuclear plants, according to the plan, which needs government approval to become policy. The expansion into renewables and nuclear power will be part of a $100 billion spending drive aimed at meeting the expected jump in demand and curbing dependence on crude, government officials said last week at a conference in Abu Dhabi, the capital of the neighboring United Arab Emirates.
Saudi Arabia, the largest producer in OPEC, uses crude and refined products as fuel for power stations because the country doesn’t have enough gas to generate all the power it needs and also supply industry. Liquid fuels generate about half of its power now, with the rest coming from gas, according to the state-run utility Saudi Electricity Co. (SECO)
Saudi Arabia has about 45,000 megawatts of generating capacity, with power demand also reaching that level during times of peak consumption, according to Saudi Electricity. Al Sulaiman’s forecasts suggest that demand will triple by 2030. Saudi Arabia already burns some 800,000 barrels a day of oil equivalent to satisfy domestic demand, Khalid Al Senani, the gas supply director at the Ministry of Petroleum and Mineral Resources, said in Doha, Qatar, on Nov. 30.
Crude Price Gains
Crude oil rose 17 percent last quarter to $106.72 a barrel in New York trading in the three months through March 31, as armed conflict in Libya cut off exports from the North African country and a March 11 earthquake and tsunami knocked nuclear power plants offline and released radiation into the atmosphere.
Saudi Arabia’s break-even oil price, the level at which it must sell crude to finance government spending, may be as high as $85 a barrel since ruler King Abdullah ordered $103 billion in additional benefits for its citizens, economists including John Sfakianakis of Banque Saudi Fransi said last week. The government hopes the increased spending will help prevent unrest sweeping the Middle East from spreading to the kingdom.
“Moving into renewables for Saudi Arabia is a necessity not a luxury,” Sfakianakis said in Riyadh today. “Saudi Arabia has oil and the more it uses domestically going forward the less it will have to export for a growing population.”
Role for Renewables
The nation sees solar power and other non-hydrocarbon sources as vital for boosting generating capacity by 50 percent in this decade, Abdullah al-Shehri, governor of the Electricity and Co-Generation Regulatory Authority, said in Abu Dhabi on March 28.
Given consumption forecasts, Saudi Aramco Chief Executive Officer Khalid Al-Falih warned last April that national daily energy demand would more than double to 8.3 million barrels of oil equivalent in 2028 from 3.4 million barrels in 2009.
To expand generating capacity and the transmission grid, the country will need to invest more than $100 billion over the next ten years, al-Shehri of the electricity authority said on March 28. A third of that amount will go to building power plants, including those using sources of renewable energy, he said in Abu Dhabi.
Current capacity is likely to increase to 75,000 megawatts by 2018 and to more than 120,000 megawatts by 2030, al-Shehri said. Saudi Arabia agreed with France in February to cooperate in developing nuclear energy and announced on Feb. 22 that it would also make use of geothermal, wind and solar power.