Identifying pathways toward sustainable electricity supply and demand using an integrated resource strategic planning model for Saudi Arabia
Date
2017
Authors
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Journal ISSN
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Publisher
University of Delaware
Abstract
Despite holding 16% of proved oil reserves in the world (equivalent to more
than 266 billion barrels), Saudi Arabia might be on an unsustainable path to become a
net oil importer by the 2030s. Decades of domestic energy subsidies accompanied by
a high population growth rate have encouraged inefficient production and high
domestic consumption of fossil fuel energy, which has resulted in environmental
degradation, and significant social and economic consequences. In addition, the
government’s dependence on oil as a main source of revenue (89%) to finance its
development programs cannot be sustained due to oil’s exhaustible nature and rapidly
increasing domestic consumption. ☐ In Saudi Arabia, the electricity and water sectors consume more energy than
other sectors. The literature review conducted as part of this dissertation revealed that
electricity use in Saudi Arabia is following an unsustainable path (7–8% annual
growth over the last decade). Due to the country’s extremely hot weather during the
summer, air conditioning represents 70% of the residential sector’s total annual energy
consumption. The water sector is another major energy consumer due to an
unprecedented demand for water in the Kingdom (per capita consumption is twice the
world average). Saudi Arabia’s water stems mostly from desalination plants, which are
currently responsible for producing approximately 18% of world’s total desalinated
water output. ☐ Since the Kingdom started restructuring its power sector in the 2000s, multiple
entities have been involved in fragmented planning activities on the supply-side as
well as to a certain extent on the demand-side; moreover, comprehensive integrated
resource strategic plans have been lacking at the national level. This dissertation
established an integrated resource strategic planning (IRSP) model for Saudi Arabia’s
electricity and water sectors (i.e., the EWS model). This model is a useful optimization
tool for integrating demand-side and supply-side resources and for aligning
fragmented energy policies among various entities with overall economic, social, and
environmental objectives. With all of its components and details, the IRSP can clearly
determine the Kingdom’s future vision of its utility sector, including goals, policies,
programs, and an execution timetable, taking into consideration economic,
environmental and social benefits. To provide input to the EWS model, a weatherbased
hybrid end-use econometric demand forecasting model was developed to
comprehensively project electricity demand in all sectors and regions until 2040. This
proposed forecasting model evaluates weather and climate change impacts on Saudi
Arabia’s electricity demand. ☐ On the supply-side, the analytical economic efficiency and technical
assessments reveal that Saudi Arabia can supply almost 75% of its electricity from
renewable energy sources by 2040. On the demand-side, the results also reveal that
there is a significant achievable potential for saving 26% of peak demand by 2040.
Even with the strong potential for demand-side management and renewable energy
identified in Saudi Arabia, the development of sustainable energy systems in the
country’s utility sector will not occur automatically. For this purpose, several actions
are proposed for developing the sustainable energy roadmap, strategies, and policies
for Saudi Arabia’s utility sector by addressing three key steps: (1) formulating a longterm
goal that incorporates national targets for Saudi Arabia, (2) facilitating the
achievement of these goals through the implementation of sound policies and
regulations, and (3) creating effective governance structures and administrative
processes to ensure that new policies and regulations are enforced and reviewed
regularly. The dissertation suggests several important conclusions related to the design
of effective intervention policies for a sustainable Saudi utility sector, supporting its
position as a new vehicle of growth that facilitates national and socio-economic
development and economic diversification plans.
Description
Keywords
Applied sciences, Social sciences, Demand-side management, Integrated resource strategic planning, Levelized cost of electricity