The world's oil producing powerhouse Saudi Arabia may be the next Arab Gulf state after the United Arab Emirates to build nuclear power plants in an effort to save more of its valuable crude for export and domestic demand, according to officials.
"We want to see 20% to 25% of our energy coming from nuclear power in 15 years," Bakr Khoshaim, a power consultant and member of the Shura Council, Saudi's consultative body, told Zawya Dow Jones.
Saudi may need nuclear power as its rapidly growing population consumes more of its oil in the domestic market for transport and to fuel its existing power plants.
"There are efforts coming out in terms of coordination and feasibility. We wish this would be expedited," said Khoshaim.
Demand for electricity from the nation's population of 28 million is already straining its power grid and devouring more of the precious fuel used to fire generators.
In 2007, Saudi Arabia consumed approximately 2.3 million barrels of oil a day, up 50% since the start of the decade, according to the U.S. government's Energy Information Administration.
If the country sticks to its growth projections it will need an additional 5 million barrels a day in less than 20 years, which will wipe out half of the kingdom's export revenue, according to Ahmad Al-Sa'adi, vice president in charge of pipelines, distribution and terminals at Saudi Aramco, the state-owned oil giant.
To make up for the lost revenue, Aramco will have to produce an additional 3 million barrels a day, above its current daily capacity of 12.5 million barrels, a difficult task that will require an investment of $700 billion, Al-Sa'adi said
Monday in a presentation at a power and water industry conference in the Jeddah, the port city on the Red Sea.
The other option is to improve the efficiency of its transportation network and power grid, or to look at better ways of transforming heavy oils into gas, which produces cleaner electricity at higher yields. But this technology is
currently too expensive and will require a dramatic shift in the way electricity is generated in Saudi, Al Sa'adi said.
The kingdom's appetite for electricity is growing at a relentless pace. Power generation capacity has increased 52% to 39,242 megawatts in 2008 compared with
the turn of the century, but consumption is expected to rise to around 70,000 megawatts in 2020, according to the Saudi Electricity Co. Over the next 10 years the company plans on investing $80 billion to add 20,000 megawatts to the grid,
its chief executive said in July.
SAVE ENERGY
With electric power using around 75% of Saudi Arabia's domestic oil, the need for another source of energy has become acute. And as the kingdom rolls out a $400 billion spending plan over the next five years to build the infrastructure needed to diversify its economy away from hydrocarbons, it will need all the money it can get from oil exports.
"We need to save our energy for other uses," said Koshaim from the Shura council.
Of course the prospect of Saudi Arabia developing atomic power plants may raise nuclear proliferation concerns in the region. But the feeling in the kingdom is that the peaceful application of the technology will not meet much resistance, especially after the U.A.E. has pushed on with its program with Washington's support.
"Every country has the right as long as they are NPT [Non Proliferation Treaty] signatories," said Khaled Aleissa, the director of Saudi's Atomic Energy Research Institute.
As one the country's top advisers on this issue, Aleissa said discussions are being held at senior levels of the government but a decision hasn't been made whether to start a local program, or perhaps partner with neighboring countries
and use the newly established regional power grid.
But the message from Aramco has the countries power and water industries -- the largest domestic consumers of oil -- worried about the future and searching for alternative energy sources, including nuclear.
"Saudi Arabia will need aid in another 50 years if we continue on this path," said Adil Bushnak, chairman of the Jeddah-based Bushnak Group which operates in the water industry. "We don't want to be another African country looking for
aid."
Source: Dow Jones
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