JEDDAH: Top oil exporter Saudi Arabia expects to see growth in power demand drop by half after 2015 as the kingdom boosts its capacity, the chief executive of state-controlled Saudi Electricity Co (SEC) said.
"We don’t expect it [demand growth] to remain at eight percent for 10 years," Ali al-Barrak told reporters late on Sunday.
"In the next five years we expect it to be seven to eight percent but then… it will drop to four to five percent after 2015 through 2020," Barrak said on the sidelines of an industry event.
SEC plans to invest $80 billion to boost capacity to least 70,000 megawatt by 2020 from an installed capacity of 50,000 MW now, Barrak said.
"We have a plan, if the plan moves as we planned it, the growth [in demand] would not continue at eight percent," he said.
Around 50 percent of Saudi Electricity capacity is fired by heavy fuel oil, crude and diesel. The rest is fired by gas, Barrak said.
"If the gas is available we’ll use it to all our plants," he said when asked about the use of gas to fire plants in the planned Qurayyah, the under development Riyadh PP11 and the giant 2,700 MW Ras Azzour power and water project.
SEC would its complete restructuring program in 2011 and the companies formed would be in operation by 2012, Barrak said.
The kingdom’s plan to spend 500 billion riyals till 2020 would be enough to meet domestic demand rising at a rate of 8 percent annually, Abdullah al-Hussayen, minister of water and power told reporters on the sidelines of the same conference.
"To meet demand at its current rates which we hope would drop, we need 500 billion riyals for water and power by 2020, and we expect this is what we need to meet demand which rose more than 8 percent this year" he said.
The private sector is taking part in adding capacity through independent power projects. It is spending $24 billion or around 30 percent of Saudi Electricity’s $80 billion spending program, Hussayen said in a speech he delivered at the conference.
Without reducing the rate of energy consumption growth, the kingdom could see oil available for export drop some 3 million barrels per day (bpd) to less than 7 million bpd in 2028, Khalid al-Falih, the chief executive of state oil firm Saudi Aramco, said earlier this year.