Saudi Arabia (2012)

Degree of reliance on imported energy: 

<p>
Net Exports (2007): 396,054 ktoe<br />
Saudi Arabia is a net exporter of energy sources, most notably being the most prolific oil and petroleum product producing country in the world. It was the world&rsquo;s largest producer and exporter of total petroleum liquids in 2010, and the world&rsquo;s second largest crude oil producer. It has approximately one-fifth of the world&#39;s oil reserve, and the fourth-largest natural gas reserve in the world. The only major imports in the energy sector come from petroleum products (3,846 toe in 2007).</p>

Main sources of Energy: 

<p>
Total Installed Electricity Capacity (2009): 44.49 GWe</p>
<p>
Total Primary Energy Supply (2009): 157,855 ktoe<br />
Oil: 61.1%<br />
Natural Gas: 38.9%</p>
<p>
In 2009, Saudi Arabia produced 217,082 GWh of electricity.</p>

Country: 

Saudi Arabia

Extent of the network: 

<p>
Saudi Arabia&rsquo;s electricity distribution network extends to cities, towns and villages across the country.</p>
<p>
Access to electricity across the country stands at 97%.</p>

Capacity concerns: 

<p>
The Saudi Arabian electricity generating capacity has a reserve margin of roughly 3%, compared to a global average of 10%. Demand has also continued to outstrip growth in supply, leading the Saudi Electric Company (SEC) to withhold supplies to some areas during peak demand times.</p>

Potential for Renewable Energy: 

<p>
<b>Solar energy</b><br />
Saudi Arabia has good potential for solar energy use, with an average irradiance of 5.8 kWh/m2/day, or the average annual solar radiation of 2,200 kWh/m2. The national science agency recently announced a new initiative to construct solar-powered desalination plants, with construction of the first stage, a 30,000 m3/day plant in Al-Khafji, due for completion in late 2012. Under the terms of an agreement signed in June 2010, Saudi Aramco are to develop a pilot solar power plant that will have a capacity of 10 MW and is due to come on stream in 2011. Another 20 MW solar power plant is due to be built at King Abdullah University of Science and Technology, along with a center devoted to PV technology.</p>
<p>
<b>Wind energy</b><br />
Saudi Arabia has high wind energy potential, with some 4.9 hours of full-load wind per day on average, the highest wind energy potential in the region. Several sites have been identified as having suitable potential. An economic assessment of a wind farm of 20 MW installed capacity in the Eastern region of Saudi Arabia found that the wind farm could generate 59,037.7 MWh of electricity annually with plant capacity factor of 33.7%, excluding the wake losses of 3.48%. With prevalent wind turbine and other equipment costs, installation, civil works, balance of plants and operation and maintenance costs, the proposed wind farm could produced the energy at US$2.94 per kWh, indicating that grid connected wind farms could be developed in and around the measurement site.</p>
<p>
<b>Geothermal energy</b><br />
Despite the potential availability of geothermal sources, the Kingdom has not made any serious advances in the sector. 10 thermal springs have been identified, with temperatures ranging from 50&ordm;C to 120&ordm;C.</p>
<p>
<b>Hydropower</b><br />
Saudi Arabia has no economically-viable hydro-electric power sources.</p>
<p>
<b>Biofuels</b><br />
Partnerships have been formed between Saudi companies and foreign investors for the production of biofuels. Plantations have been converted to grow <i>Jatropha curcas</i>, with a 5,000 hectare trial plantation. However, governmental support for the technology is low, with ministers suggesting solar energy is a more suitable energy-secure and environmentally-friendly fuel source.</p>

Potential for Energy Efficiency: 

<p>
Energy consumption per capita stands at 6.21 toe, suggesting the potential for energy efficiency measures in the demand-side sector.</p>
<p>
The transport sector is by far the most energy-intensive in the country, accounting for almost a third of total final energy consumption. In 2009, Saudi Arabia consumed 97,770 ktoe of energy. By sector, the transport sector consumed the most at 33,959 ktoe, followed by industry at 17,452 ktoe, the residential sector at 10,197 ktoe, commercial and public services at 4,551 ktoe and agriculture and forestry at 435 ktoe. By source, oil products contributed the most at 63,539 ktoe, followed by electricity at 15,778 ktoe, natural gas at 13,458 ktoe, crude oil at 5,000 ktoe and biofuels and waster at 4 ktoe.</p>
<p>
Saudi Arabia is the largest oil consuming nation in the Middle East. In 2009, Saudi Arabia consumed approximately 2.4 million bbl/d of oil, up 50 percent since 2000, due to strong economic and industrial growth and subsidized prices.</p>
<p>
A study estimated that applying energy conservation measures, namely improving thermal insulation of the external walls and roofs, more efficient glazing, fitting external shading devices, and fitting energy-efficient fluorescent lighting, in the apartment complex could collectively achieve energy consumption reductions of around 32.4%.</p>
<p>
A study investigated the influence of major design and operational parameters for different types of heating, ventilating and air-conditioning (HVAC) systems on energy consumption and found that energy savings of up to 30% can be obtained in commercial buildings while maintaining acceptable level of thermal comfort when HVAC systems are properly selected and operated.<br />
<br />
<strong>Industry</strong></p>
<ul>
<li>
Energy auditing for the sector, led by ESCOs as part of the National Energy Efficiency Programme (NEEP 2003-2009).</li>
<li>
Promotion of high-efficiency electric motor use.</li>
<li>
Proposals for the appointment of Energy Managers for large consumers.</li>
</ul>
<p>
<strong>Utilities</strong></p>
<ul>
<li>
Demand-side load management activities.</li>
<li>
Supply-side efficiency measures, including shifting capacity towards natural gas generation, and power factor reductions.</li>
</ul>
<p>
<strong>Transport</strong></p>
<ul>
<li>
No current policy, but proposals will be made under Phase II of the NEEP, which is yet to be implemented.</li>
</ul>
<p>
<strong>Residential</strong></p>
<ul>
<li>
Energy efficiency codes for new residential buildings.</li>
<li>
Standards &amp; Labelling programs for air conditioners, consumer-grade electric motors and lighting.</li>
</ul>
<p>
<strong>Public</strong></p>
<ul>
<li>
Enhancements to the institutional infrastructure to promote EE., as well as broader involvement of the private sector.</li>
<li>
Proposals for a Saudi Energy Efficiency Centre, a central institute to regulate EE programs.</li>
<li>
EE education in high schools.</li>
</ul>

Ownership: 

<p>
The <b><i>Saudi Electricity Company</i></b> (<i><b>SEC</b></i>, <a href="http://www.se.com.sa">www.se.com.sa</a>) was established as a Saudi joint stock company through the merger of several companies in 2000. It is responsible for the vast majority of generation, as well as the entirety of transmission and distribution activities in the country. Some large consumers have on-site generation, and the market is open to independent power producers (IPPs), some of which supply the SEC.&nbsp;</p>
<p>
The oil, liquid fuels and natural gas market is controlled by the state-owned and operated <i><b>Saudi Aramco</b></i> (<a href="http://www.saudiaramco.com/">http://www.saudiaramco.com/</a>).</p>

Structure / extent of competition: 

<p>
The SEC is a joint-stock vertically-integrated company, majority-owned by the state. However, generation activities are partially unbundled, with the market being open to IPPs, with some success.</p>
<p>
Saudi Aramco is under the direct supervision of the government through the Supreme Council for Petroleum and Minerals and the Ministry of Petroleum and Mineral Resources.</p>
<p>
The Saudi domestic natural gas market, traditionally the sole domain of Saudi Aramco, is slowly being opened to private investment, in exploration and distribution. Foreign consortia are exploring for onshore gas and condensate (natural gas liquids) in the Rub al-Khali, which officials hope will produce some 2 Bcf/d by 2011, although success has been limited to date.</p>

Existence of an energy framework and programmes to promote sustainable energy: 

<p>
The King Saud University in the Kingdom has established a sustainable energy technology masters and PhD program, initially focusing on wind, solar, hydrogen and nuclear energy sources.</p>
<p>
The <i><b>King Abdul Aziz City for Science and Technology</b></i> (<i><b>KACST</b></i>) recently announced a new initiative to construct solar-powered water desalination plants, reducing energy costs in the sector by up to 40%.</p>
<p>
Demonstration projects, along with some research and development projects, have been implemented in several academic bodies across the region, including the KACST, to study the potential for renewable energy transition, under the guidance of the Gulf Co-operation Council.</p>
<p>
King Abdulaziz City for Science and Technology (KACST) started a <i><b>National Energy Efficiency Program</b></i> (<i><b>NEEP</b></i>) in 2003 with a technical support by the UN Department for Economic and Social Affairs (UN-DESA) and funding by Saudi ARAMCO, Saudi Electricity Company and Saudi Basic Industries Corporation. The programme implemented energy auditing in the industrial and commercial sectors, utility load management, setting policies and regulations for residential buildings and energy-consuming appliances efficiency such as energy efficiency labels and standards for air conditioners, electric motors and lighting and energy efficiency codes for new residential buildings, improving energy efficiency information exchange, promoting energy services and private sector investments and utilization of efficient technologies, and was completed in 2009.</p>
<p>
The <i><b>National Energy Efficiency Program</b></i> (<i><b>NEEP</b></i>) Phase 2 started in 2012 with a support by the UNDP. The project focuses in four major outcomes with overall goal of capacity development for the new Saudi Energy Efficiency Centre: design of the first Energy Conservation Law and related action plans and regulations; design and establishment of a new national energy information system; design and implementation of extensive training programmes for energy manager and leaders; and design and implementation of nation-wide campaign on energy conservation.</p>
<p>
The Saudi government and its agencies, in cooperation with the Riyadh-based King Abdulaziz City for Science and Technology (KACST, <a href="http://www.kacst.edu.sa/">www.kacst.edu.sa/</a>), have begun building a desalination plant using solar power. The plant will have a capacity of 10 megawatts and a reverse osmosis plant that utilizes solar energy technologies.</p>

Current energy debates or legislation: 

<p>
Current sustainable policies, particularly energy conservation, led to peak load savings of more than 871 MW in 2001, mainly as a result of collaborations between the Ministry of Water and Electricity and the SEC. Policies and programs are being developed for public awareness, energy regulation and legislation, and energy information and programming.</p>
<p>
ECRA is currently working with international consultants to develop a National Renewable Energy Policy (NREP).</p>

Major energy studies: 

<p>
<i>Renewable Energy Scenarios for the Kingdom of Saudi Arabia</i> &ndash; Tyndall Centre, UK - <a href="http://www.tyndall.ac.uk/content/renewable-energy-scenarios-kingdom-saud...
<p>
<i>Renewable Energy Potentials in Saudi Arabia</i> - S. A. M. Said, I. M. El-Amin and A.M. Al-Shehri, <a href="http://webfea-lb.fea.aub.edu.lb/fea/research/erg/RCW/Renewable%20Energy%...

Role of government: 

<p>
The government has direct influence on oil and gas policy through their involvement with Saudi Aramco.</p>
<p>
The <i><b>Ministry of Water and Electricity</b></i> (<i><b>MOWE</b></i>, <a href="http://www.mowe.gov.sa">www.mowe.gov.sa</a>) is responsible for setting electricity sector policy, as well as long-term energy plans, and overseeing&nbsp; private investment in the sector, for example through IPPs, and possible further unbundling activities.</p>

Government agencies in sustainable energy: 

<p>
The <i><b>King Abdullah Petroleum Studies and Research Centre</b></i> (<i><b>KAPSARC</b></i>, <a href="http://kapsarc.org/">http://kapsarc.org/</a>) is a research and policy centre committed to energy and environmental exploration and analysis.</p>
<p>
The Centre promotes the development of solutions that will shape a sustainable energy future for the Kingdom. The Centre hopes to motivate companies and policy-makers to achieve: more efficient petroleum use, reduced carbon footprints, sustainable energy solutions, adoption of new energy and environmental technologies.</p>
<p>
The <i><b>King Abdullah City for Atomic and Renewable Energy</b></i> (<i><b>K.A.CARE</b></i>, <a href="http://www.energy.gov.sa/">www.energy.gov.sa/</a>) was created by Royal Decree of 17/4/2010 with a mandate to contribute to sustainable development in the Kingdom through developing an alternative energy capacity. It serves as a centre for renewables research and for co-coordinating national and international energy policy.</p>
<p>
The <i><b>King Abdullah University for Science and Technology</b></i> (<i><b>KAUST</b></i>, <a href="http://www.kaust.edu.sa/">www.kaust.edu.sa/</a>) has been given the task of making Saudi Arabia a key energy researcher in the world, and co-operating with other scientific bodies globally to promote renewable and sustainable technologies.</p>

Energy planning procedures: 

<p>
The <i><b>Ministry of Petroleum and Mineral Resources</b></i> is responsible for national planning in the area of energy. The <b><i>Ministry of Water and Electricity</i></b> is responsible for setting long-term energy plans.</p>
<p>
Saudi Arabia is moving forward with plans to produce power from nuclear reactors by 2020 in order to meet growing domestic power needs and to free up oil and natural gas for export and higher-end uses than direct burn for power generation. In the interim, Saudi Arabia is participating in the Gulf Cooperation Council&rsquo;s efforts to link the power grids of member countries in order to reduce shortages during peak power periods.</p>

Energy regulator Date of creation: 

<p>
The <b><i>Electricity and Cogeneration Regulatory Authority</i></b> (<b><i>ECRA</i></b>, <a href="http://www.ecra.gov.sa/">www.ecra.gov.sa/</a>) was established in 2002, and is responsible for regulation of the electricity and water desalination industries, in order to provide such services to the country at the lowest price, whilst maintaining the highest standards and quality of service.</p>
<p>
The <i><b>Ministry of Petroleum and Mineral Resources</b></i> (<b><i>MOPM</i></b>, <a href="http://www.mopm.gov.sa/">www.mopm.gov.sa/</a>) was established in 1960 to execute the general policy related to oil, gas and minerals. The Ministry supervises its affiliate companies working in the fields of petroleum and minerals, including Saudi Arabian Company (Saudi Aramco), Saudi Texaco, Aramco Gulf Operation Ltd. (AGOC), Saudi Arabian Mining Company (Ma&rsquo;aden) and Saudi Geological Survey.</p>

Degree of independence: 

<p>
ECRA is supervised by a board of directors chaired by the Minister of Water and Electricity, with the Governor of the Authority as deputy chair, six members from senior government officials representing the ministries of Water and Electricity, Finance, Petroleum &amp; Mineral Resources, Commerce &amp; Industry, Economy &amp; Planning, and the Saline Water Conversion Corporation (SWCC); and five members selected on their own merits. The ECRA is 100% funded through license fees, and financially and administratively independent.</p>

Regulatory framework for sustainable energy: 

<p>
The <i><b>Electricity Law</b></i>, adopted and issued by Royal Decree No. M/56 on in 2005, is central in the regulation and development of the electricity sector in the Kingdom, including the outline of the restructuring of the electricity industry and the deregulation of the electricity market.</p>

Regulatory roles: 

<p>
The responsibilities of the ECRA include:</p>
<ul>
<li>
Preparation of a restructuring plan for the electricity industry, to end vertical integration, and create non-discriminatory independent market operators,</li>
<li>
Continue to promote private-sector participation in the generation sector through IPPs,</li>
<li>
To promote and effect the &quot;Parallel Market&quot;, that permits large consumers to obtain their electricity services directly from the suppliers of their choice on the basis of mutually agreed prices and other commercial terms,</li>
<li>
To set and adjust as necessary tariffs for electricity.</li>
<li>
To prepare a system of key performance indicators (KPIs) for the electricity industry.</li>
</ul>

Role of government department in energy regulation: 

<p>
The Saudi Arabian government is responsible for setting the natural gas tariffs and pricing in the region. This is often seen as an indicator for other regulatory authorities in the region, and a guideline for their natural gas tariffs.</p>

Regulatory barriers: 

<p>
While raising domestic energy prices is supposed to encourage greater energy efficiency, it creates a serious problem in the Kingdom as the basis of the political system in the Kingdom is an unwritten social contract between ruler and ruled through which the population receive various benefits including low energy prices and virtually inexistent taxes in return for accepting to be ruled.</p>

References: 

EIA (2011) &lsquo;Country analysis briefs &ndash; Saudi Arabia&rsquo;, Last updated January 2013, available at: <a href="http://www.eia.gov/countries/country-data.cfm?fips=SA">http://www.eia.go... [Accessed 28 July 2013].<br />
<br />
Alyousef, Y. and Stevens, P. (2011) &lsquo;The cost of domestic energy prices to Saudi Arabia&rsquo;, Energy Policy, Vol. 39: 6900-6905.<br />
<br />
Fasiuddin, M. and Budaiwai, I. (2011) &lsquo;HVAC system strategies for energy conservation in commercial buildings in Saudi Arabia&rsquo;, Energy and Buildings, Vol. 43: 3457-3466.<br />
<br />
Hepbasli, A. and Alsuhaibani, Z. (2011) &lsquo;A key review on present status and future directions of solar energy studies and applications in Saudi Arabia&rsquo;, Renewable and Sustainable Energy Reviews, Vol. 15: 5021-5050.<br />
<br />
Rehman, S., Ahmad, A., and Al-Hadhrami, A. M. (2011) &lsquo;Development and economic assessment of a grid connected 20 MW installed capacity wind farm&rsquo;, Renewable and Sustainable Energy Reviews, Vol. 15: 833-838.<br />
<br />
Taleb, H. M. and Sharples, S. (2011) &lsquo;Developing sustainable residential buildings in Saudi Arabia: A case study&rsquo;, Applied Energy, Vol. 88: 383-391.<br />
<br />
IEA (2012) Country Information. Available at&nbsp;<a href="http://www.iea.org/stats/countryresults.asp?COUNTRY_CODE=SA&amp;Submit=S... />
<br />
Higher Colleges of Technology: &quot;Energy in Saudi Arabia: a kingdom running on empty?&quot;, 22nd March 2010.&nbsp;<a href="http://knowledge.wharton.upenn.edu/arabic/article.cfm?articleid=2424">ht... 28 July 2013].<br />
<br />
Renewable Energy World: &quot;Saudi Arabian plantations to produce biodiesel&quot;, 17th February 2005.&nbsp;<a href="http://www.renewableenergyworld.com/rea/news/article/2005/02/saudi-arabi... 28 July 2013].<br />
<br />
Circle Of Blue: &quot;Saudi Arabia to use solar energy for desalination plants&quot;, 26th January 2010.&nbsp;<a href="http://www.circleofblue.org/waternews/2010/world/saudi-arabia-to-use-sol... 28 July 2013].<br />
<br />
ECRA (2005) &lsquo;Electricity Law&rsquo;, available from: <a href="http://www.ecra.gov.sa/pdf/electricitylawen.pdf">http://www.ecra.gov.sa/... />
[Accessed 28 July 2013].<br />
<br />
UNDP (2009) &lsquo;Saudi Arabia: National Energy Efficiency Programme in Saudi Arabia&rsquo;, UNDP Success Story Lead, available from: <a href="http://web.undp.org/comtoolkit/success-stories/ARAB-SaudiArabia-energyen... [Accessed 28 July 2013].<br />
<br />
UNDP (2012) &lsquo;National Energy Efficiency Program: Phase 2&rsquo;, available from: <a href="http://www.undp.org.sa/sa/index.php?option=com_content&amp;view=article&... />
<br />
Electricity and Co-Generation Regulatory Authority: <a href="http://www.ecra.gov.sa">www.ecra.gov.sa</a>