SAUDI ARABIA has to invest SR300 billion ($80.2 billion) in the power sector over 10 years and requires an additional 30 gigawatts (GW) over the next 20 years to meet its needs, according to Saleh Al Awaji, Deputy Minister of Water
and Electricity.

He said the current power capacity in Saudi Arabia was 50 GW compared to 23.8 GW in 2000, adding the average growth forecast was for eight per cent annually.

An additional capacity of 27 to 30 GW power would be needed over the next 20 years, he said.

Although sitting on the world’s biggest oil and fifth gas reserves, Saudi Arabia is struggling to keep pace with rapidly rising power demand, as petrodollars have fuelled a region-wide economic boom as well as rapid population growth.
The biggest challenge facing Saudi Arabia’s power sector is the high rate of demand growth, the need for capital and attracting private investors.

About half a million new housing units would be coming up in the next three to five years and a lot of energy would be needed to serve these units, he said.

The country needs to anticipate measures to reduce the high rate of growth and investigate the major areas of electricity consumption, which is air-conditioning.

Independent power projects (IPP) from 2011 to 2020 will add 12,000 MW of capacity and this is estimated to cost SR80 billion ($21.33 billion).

Saudi Arabia recently said it would step up its use of crude oil for power generation in 2011.

The water sector has similar challenges with ongoing projects currently valued at SR120 billion ($31.9 billion).