NEW SAUDI WIND FARM RAISES THE RENEWABLES ENERGY BAR

Saudi Arabia is pushing hard to expand its power generation and deploy renewable energies and natural gas to meet its rising needs.

But it is also rationalising its power consumption, which is 15th highest in the world per capita, according to the World Bank.

The country has put in place a strategy to rein in consumption, reducing dependence on oil-fuelled power generation and finding more efficient and sustainable ways to produce power for the growing economy.

In 2018, Saudi Arabia reported burning an average of 0.4 million barrels per day (bpd) of crude oil for power generation, the lowest amount since at least 2009, the earliest year that data are available from the Joint Organizations Data Initiative (JODI).

Saudi Arabia burns considerably more crude oil directly for power generation than any other country. Between 2015 and 2017, Saudi Arabia used more than three times the amount of crude oil for power generationthan Iraq, the second-largest user of crude oil for power during those years, according to the Energy Information Administration (EIA), the statistical arm of the US Department of Energy.

“Natural gas processing capacity is also increasing. Consumption of natural gas in Saudi Arabia reached 10.6 billion cubic feet per day in 2017, the latest year for which data are available,” the EIA said. “With less crude oil directly used for power generation, more crude oil is available for Saudi Arabia’s refining and exports. For many years, Saudi Arabia has worked to increase its domestic refinery capacity and is currently able to process 2.9 million bpd of crude oil.”

The Saudi Electricity Company’s (SEC) latest half-yearly results show that Saudi businesses and citizens are playing their part in conserving energy. The largest power company said year-on-year consumption fell 2.4% in the first half of 2019, primarily driven by consumption rationalisation in residential and commercial segments. It was the 12th consecutive quarterly drop in fuel consumption.

However, subscribers grew 4% year on year to reach 9.6 million customers, the SEC said. The company reduced consumption of oil by 8 million barrels in the first half of 2019.

“Energy demand growth is expected to be flattish or declining in the short-term (one to two years) and to resume modest growth from 2021 onward,” the SEC said.

To prepare for the upturn, the SEC’s generation capacity has been rising 5.7% annually since 2000, while growth in transmission grid line is growing at a brisk pace of 6.3% annually over the same period, the company said in an investor presentation.

The number of electrified communities have risen 73% over the past 18 years to 13,137 in 2018, said the company, which controls 70% of power-generation assets in the country. SEC generates 52.9 GW of electricity through its 40 power plants across the kingdom.

During the first half of 2019, the SEC added 436 MW of new-generation capacity in the Waa'd Al Shamaal project, a solar power project.

he SEC has also been upgrading its infrastructure, with its four operating regions now 90% interconnected. It is also bolstering its extra high voltage lines and transformer capacities and investing in rolling out its fibre optic infrastructure.

Steam turbines using thermal energy, are emerging as the biggest energy source, taking their share of power generation in SEC’s portfolio to 22.49% in the first half of 2019, compared to 19.35% in 2016. Gas turbines have reduced their share to 17% in the first half of the year compared to nearly 23% in 2016. Combined cycle has also raised its share to 13.33% (compared to 11.95% in 2016).

Renewable energy still contribute a small portion of energy source for the SEC, but that would change as the kingdom has announced plans to seek between USD 30 billion and USD 50 billion in investments by 2023 to help meet the 9.5 GW target for solar and wind energy.

According to the Arab Petroleum Investment Corporation, projects with a combined capacity of 16,930 MW are being built in the kingdom.

The private sector is stepping up to invest in the country's renewable energy sector and taking advantage of the conducive environment in the country.

Indeed, independent power projects have been playing an increasing role in the kingdom’s power-generating sector over the past decade with non-SEC capacity represents around 30% of the country’s total, Apicorp said.

“IPPs in the kingdom provided a quick solution to the problem of rising demand, along with several other benefits to the government,” APICORP said.