In an excellent round-up of the shifting energy sector in Saudi Arabia, James Conca in Forbes discusses Saudi Arabia’s embrace of nuclear and renewable energy sources to meet demand – an important initiative for the increasingly energy-hungry Saudi society.
“Saudi Arabia burns almost a billion barrels of oil a year to produce electricity, this change in production is critical to their economic future. It is much more profitable to sell their oil and gas to China and the West instead of burning it for power. The cost of the oil used to burn to produce electricity is heavily subsidized by the government, which increases waste and inefficiency and is detrimental to their overall GDP. Saudi officials are worried that the present trend of increasing oil use in the Kingdom will hurt their economy in only a few short years, so this change is needed right now,” Conca writes.
Saudi Arabia is also investing big in solar, nuclear is still cheaper for the Kingdom right now, although solar costs may be reduced over the next decade as new technology emerges.
With power demands soaring, more players are getting in to renewables to supply it. A leading Saudi construction company, Al Khodari, said on Sunday that it would diversify into solar and nuclear energy.
Regrettably, as Conca notes and we’ve written here in SUSTG before, the U.S. may miss out on this nuclear bonanza because the U.S. does not have a 1-2-3 agreement with these states.
