RIYADH (Reuters) – Saudi Arabia expects renewable sources to contribute to its energy mix as its need for power triples over the next two decades, but the exact percentage will hinge on oil prices, a government official said on Wednesday.
The top oil exporter has said it hopes to draw 10 percent of its power output from mostly solar energy and other renewable sources by 2020.
“I think any number can be achieved, provided there is enough support for it from studies, analysis,” Abdullah al-Shehri, governor of the Saudi Electricity and Co-Generation Regulatory Authority (ECRA) told the Reuters Middle East Summit in Riyadh.
Among many factors, he said, “If prices of oil continue going up, it will give more support and incentives. If they go down, it is going to slow things.”
So far, Saudi Electricity Co’s installed power capacity stands at 50,000 megawatts, of which 45 percent is fired by gas, 13 percent from heavy fuel oil, 22 percent from diesel and 20 percent from crude, according to 2008 figures. Oil rose above $80 a barrel on Wednesday, supported by signs that U.S. fuel stockpiles are falling and as some investors took the view that an interest rate increase by China would do little to dampen its oil use.
Demand for electricity in the desert country is rising at an annual rate of 8 percent, Shehri said, with its peak load at around 44,000 MW.
Shehri reiterated that power demand was expected to triple to 121,000 MW by 2032, adding that fuel consumption would also triple by then, but he expected the energy mix to change.
“Do we have more gas, less gas; do we have nuclear; do we have renewables?” Shehri said.
Shehri was asked about nuclear plans, which experts say are a distant prospect despite some preparatory moves.
“As far as ECRA is concerned, any power plant that is going to be producing will be welcome, because the demand growth is high and it’s not only the peak load (that) is increasing but also the base load,” Shehri said.
He said ECRA is awaiting approval from authorities after submitting a proposal for renewable regulation, which could be put in place in 2011.
Saudi Arabia is pumping around 8.1 million barrels per day of oil, its oil minister said on Monday.
About a tenth of the country’s production in barrels of oil equivalent (BOE) goes to power generation, Shehri said, without providing an exact figure.
Around 30 percent of Saudi Arabia’s power and water production comes from co-generation, Shehri said. Cogeneration lowers carbon dioxide emissions and raises energy efficiency.
SEC is believed to be paying around $0.25 per kilowatt hour to provide power in remote areas in the kingdom during peak summer demand, said Vahid Fotuhi, director, Middle East, of BP Solar, a division of BP.
If the kingdom instead were to build 50 MW solar power plants, it would cost considerably less and the output would be much more sustainable, Fotuhi said.
Separately, a power grid between Saudi and Egypt — an ongoing project — is feasible economically but not geographically as both countries need to lay cables in the Red Sea, he said, without elaborating.