Hashim Yamani, president of King Abdullah City for Atomic and Renewable Energy, explained Saudi Arabia’s determination to pursue alternative sources of energy, including the nuclear option.
Delivering a keynote address at the 5th Global Competitiveness Forum in Riyadh, Yamani noted that the nation’s rapidly increasing population coupled with a massive push in the industrial sector would sap its hydrocarbon resources if they were used to satisfy the growing domestic consumption.
"Our economy grew by 3.8 percent in 2010 and is clearly on an upward path following a sluggish, albeit positive, growth in 2009," he said. "Our industrial sector grew by 6.7 percent until 2008. In 2009, it grew by 3.1 percent, which was much better than most economies for that very year. This growth will require timely decisions and careful investments to continuously fuel the economic development of the country and henceforth the prosperity of future generations."
As a result of economic growth, he said, it is expected that electricity demand in Saudi Arabia will triple by 2032, and the demand for oil has also been growing at an alarming rate.
“Over the past four years, the total local demand on oil has grown by 27 percent. Our current fleet of power plants can barely meet current demand, and I have not even talked about establishing respectable capacity reserve or planned capacity retirement. The challenge, therefore, is to meet the growing demand, reaching more than 80 gigawatts of additional required capacity by 2030, in a sustainable way.”
A reasonable question to ask is why Saudi Arabia would not do what should look reasonable and natural to do, which is to just burn more oil and more gas to meet this demand increase?
Yamani responded by saying there is a catch to this “business as usual” scenario.
"The catch is that by 2028, Saudi Arabia would be consuming more than eight million barrels of oil equivalent to fuel its economy, including transportation, industry and electricity. This will seriously hamper the Kingdom’s ability to meet international demand for oil, and may adversely affect its leading position in the global energy landscape."
Therefore, Yamani said, the Kingdom was weighing all options — including nuclear energy.
“Nuclear and renewable energy contributed 12 percent of total installed capacity in 2007, and are expected to reach 19 percent by 2030 with an annual growth rate of 4.7 percent,” he said. “It is imperative to stress here that alternative energy would not have made inroads in contributing to the global energy mix without carefully developed support measures. The deployment of new sustainable energy systems may cost more than non-sustainable energy systems over the short term, but in the long term this investment is expected to pay dividends handsomely.”
Yamani noted that the financial aspects of power generation were paramount in determining the right places to invest.
"In the process of designing a new energy mix, we have been cognizant of the question: What is the cost of producing electricity from alternative sources of energy in Saudi Arabia? Several key parameters must be considered in developing the benefit-cost analysis of alternative energy deployment,” he said. “These parameters include oil price, electricity demand pattern and financial-investment parameters, including discount rates, leverage and cost of capital based on various scenarios of government and private-sector participation.”
He said King Abdullah City for Atomic & Renewable Energy, which was launched eight months ago, would take the lead in the Kingdom’s domestic energy transformation.
“The King Abdullah Atomic City aims at contributing to the sustainable development in Saudi Arabia through utilization of innovation, science, research and industries related to atomic and renewable energy for peaceful purposes in a way that leads to raising the standards of living and quality of life in Saudi Arabia,” Yamani said. “This action sets in motion a series of initiatives designed to transition Saudi Arabia from total dependence on fossil fuel for electricity generation and water desalination toward a sustainable energy mix … The sustainable energy mix, as we envision it, would minimize the share of fossil fuel generation by 2050.”
Yamani credited the forward thinking of Custodian of the Two Holy Mosques King Abdullah for a strategy designed to foster domestic economic development without detracting from the nation’s role as a major supplier of energy to the world.
“It took a visionary king to usher in the age of petrochemical industry in Saudi Arabia. It also took a visionary king to usher in the age of alternative energy in Saudi Arabia,” Yamani said. “Henceforth, the ‘Kingdom of Energy’ shall be known as the ‘Kingdom of Sustainable Energy.’”
