Saudi Arabia may double domestic oil use by 2023 as energy demand increases, cutting the amount of crude for export to less than half pumped volumes in two decades, the head of generator ACWA Power International said.
The kingdom consumes about 1.2 million barrels a day of oil and refined products for power generation and about the same amount of crude for processing, ACWA Power Chief Executive Officer Paddy Padmanathan said today at a conference in Abu Dhabi.
Unless the government goes ahead with a plan to diversify power generation sources, crude available for export could slip to 45 percent of the total produced by 2030, he said.
Arabian Gulf states are boosting power supply to meet rising demand from growing populations and as they aim to spur economic growth through investment. Saudi Arabia is seeking private investors to build plants to run industrial cities it’s constructing. The largest Arab economy should adopt solar power as it seeks to diversify generation sources, Padmanathan said.
Saudi Arabia aims to boost generating capacity to 75,000 megawatts by 2020 from about 45,000 megawatts now, with 20 percent produced by renewable sources. The world’s biggest oil exporter pumped 8.23 million barrels in October, according to Bloomberg estimates.
State crude producer Saudi Aramco estimates domestic energy demand will rise to 8.3 million barrels a day of oil equivalent in 2028 from 3.4 million barrels in 2009 unless the kingdom becomes more efficient, according to comments by chief executive Officer Khalid al Falih posted on the company website in April. The increase in demand may be cut by 50 percent through improved energy efficiency, he said.
Creating an industry to develop the materials and technology necessary to build plants powered by the sun will help speed adoption of the technology, Padmanathan said.
ACWA Power, which builds and operates natural gas and oil fired plants, is involved in seven partnerships to develop facilities in Saudi Arabia and is bidding on an eighth, he said. Saudi Arabia is set to generate about half its power from plants running on natural gas and half from facilities using oil and refined products once that expansion is complete, he said.
Under a long term plan to diversify fuel sources by 2030, the country is likely to generate 20 percent of its power from solar plants, 20 percent from nuclear energy, 40 percent from gas and 20 percent from oil and crude products, Padmanathan said.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.