As most countries in the Gulf region, Saudi Arabia is developing extremely fast. The population and the infrastructure are growing at a very high rate. This is resulting into a fast-growing electricity demand. Analysts estimate that power requirements will continue to grow by 10 percent each year. Imagine 10 percent each year!
To face this challenging situation, Saudi Arabia is undertaking the right steps to face the rapid changes and new demands. For example the harmonization of the national grid is ongoing. Recently, the Saudi Electricity Company (SEC) announced the completion of a 155 million euro project. This project is a big progress in a harmonized grid solution. Siemens has been the partner for this project and the 380 kilovolt substation located in Al-Qassim province built by Siemens adds 1,000 Mega Volt Ampere (MVA) of firm power transmission capacity to the Saudi Arabian grid.
It helps keep pace with the rapidly growing demand of power as a result of the link created between the country’s regional electricity networks. It is transmitting ultimately 1000 MVA of power from the central region to the western region via Madinah or vice versa.
I would say there is no such thing as a single way. In Saudi Arabia, for projects like the Hail Extension II gas turbine power plant and the new Al Qurayat Expansion II gas turbine power plant, Siemens will supply turbines to help cover the immediate energy demand. But to fulfill the world’s — not just Saudi Arabia’s — demand for energy, we need a mixture of energy concepts. The big question more or less is — what is the future of energy?
Allow me to elaborate on this question. In the future, fossil energies and renewable energies, as well as modernization of existing power plants to increase energy efficiency will play a role. Finding the right energy mix is the key to providing secure, reliable and affordable supplies.
But it is important to understand that there is no definitive optimal mix that can be applied everywhere. Each region has its own unique conditions that need to be carefully analyzed in order to develop a sustainable customized solution. A concept for hydro power plants in Saudi Arabia would obviously not fly, but to consider solar energy makes a lot of sense in this region. Indeed, solar plants in the Kingdom are promising prospects.
There is another important way in which we can secure present and future energy supplies: that is by increasing energy efficiency along the complete energy conversion chain. This can unleash tremendous savings potentials. Moreover, the earth would benefit in two ways: Fossil resources would be conserved and CO2 emissions would be reduced.
The most advanced generation of combined cycle power plants for example operates at an efficiency of more than 60 percent, which is much higher than conventional power plants. Technological improvements at every stage of the energy conversion chain can substantially reduce the consumption of fossil fuels and increase the output from renewable energy sources.
I think the figures are convincing. Thanks to lower fuel consumption, each new efficient power plant of this generation could avoid the same quantity of CO2 emissions per year as would be produced by 10,000 cars driven 20,000 km each.
Fossil fuels will continue to play an important role for the foreseeable future due to high-energy density, the existing power plant infrastructure, and their long-term availability especially in Saudi Arabia. I believe that even in 20 to 30 years only parts of the generation will replace fossil solutions with wind or solar. On the other hand, fuels are a useful resource.
It is a valuable feedstock for many industrial developments in the Middle East. This is why we at Siemens are convinced that the importance of renewable energy sources will increase even in oil-rich regions. At the same time, we recognize, as mentioned earlier, the importance of technical improvements in fossil power generation. We believe this because of two reasons: First, there is a high potential to reduce carbon emissions.
And second, innovative technology generates more electricity from less fuel. Better efficiency along the conversation chain saves money and helps to protect the environment. Allow me to give you two examples: Siemens gas turbine — world’s largest — makes a new combined-cycle power plant deliver an efficiency of more than 60 percent. Doesn’t this sound record-breaking? And carbon capture and storage is one important innovation that will help exploit oil fields better.
Carbon capture and storage is a technology into which Siemens has been investing a lot of innovational work force and its proven engineering know-how. The complexity of the technology is immense, but in very simple words the principle is to capture CO2 from combustion and store it in oil fields. It results in more pressure in oil fields and better exploitation. The other positive outcome is on the climate thanks to reduced CO2 air pollution.
I believe that, when the considerations of efficiency, reliability of supply, and environmental and climate compatibility are weighed, future electricity production will require the use of nuclear energy. In the Middle East nuclear power will play a role. In Europe the situation is a bit different. In some countries it will be a political decision as to whether nuclear energy should be part of the energy mix necessary to protect the climate.
The competition in the country is as tough as anywhere but I see strong advantages for Siemens here. I would like to give a quick insight into the reasons that give us our strength here:
We have a trustful and long-lasting relationship of 75 years in the country. As a conclusion we know our customers very well and we have been cooperating with them on important large and small turn key infrastructure projects for many years. Our target is to improve and better understand our customer needs every day.
Today more than 1,800 people are working for Siemens in Saudi Arabia, I am not sure, but I believe no other international competitor in the field of energy has a bigger local team here. It shows our strong commitment to the Kingdom. Our local headquarters are in Riyadh, but we cover the complete country with offices in Jeddah, Alkhobar and Jubail. In Jeddah, Siemens also maintains a switchgear and energy automation factory.
If it comes to customer service our company ISCOSA in Dammam is without doubt a success story. For more that 30 years it has been providing service solutions to our customers. It is the largest repair facility of its kind in the Middle East for rotating equipment such as compressors, gas and steam turbines and others. ISCOSA is also responsible for the long-term maintenance contracts with our local customers.
For our customers it is important that we are locally strong but also have access to international know-how and innovation. As Siemens, we can fulfill this desire. Last but not least, Siemens is the only company that can help customers with innovative and sustainable solutions at every level of the energy conversion chain. Our portfolio comprises products and services that ensure reliable and efficient power supply for the rapidly growing power demand in the Middle East. We look forward to a prominent future.
