The Saudi population of over 23 million could double by 2050, a threat as well as an opportunity to enhance resources of the Kingdom, particularly power generation, according to a Saudi expert on energy and water. “The sharp population growth rate in Saudi Arabia will have an enormous impact on the need to increase power generation, a situation that should be addressed now,” said Engineer Walid Saleh Basoudan, president and chief operating officer of Saudi Masader Company for Water and Power. Basoudan presented an overview of the energy market in Saudi Arabia at the First GCC Conference on Oil, Gas, and Petrochemicals during the World Financial Crisis that concluded here last week. “Based on Saudi Arabia's past history of electricity production, matching gross domestic production (GDP) growth, electricity production in 2020 could reach 410,000 megawatts, higher than government projections, a situation that requires more reassessment,” according to Basoudan. The government has projected that Saudi electricity generation capacity will need to expand to about 70,000MW by 2020, taking into account the six percent rise in demand every year. For years, however, peak load has been outpacing power generation capacity, prompting year-round campaigns on power conservation. Basoudan said the modernization of infrastructures and planned industrialization, in addition to the increase in population, will put pressure on the need to further increase power generation. “As of now, 35,000MW generations capacity is planned, which is supported by 30,000 kilometers of transmission network,” he said. The plan to increase power generation is threatened by the current financial crisis, which trimmed down commercial bank lending capacity to power generation projects in Saudi Arabia as well as in the Gulf region, according to Basoudan. He suggested that power generation projects should seek better financial opportunities through the facilities of the global capital market, including the international bond market. He said a number of options and opportunities will better position the power generation sector in Saudi Arabia, as well as in the GCC region. These are the setting up of power master plans, encouraging competition in the power generation sector, establishing vertical and horizontal integration to enhance competition, setting up open access to transmission to allow generators to deliver power to distributors and large consumers, and to establish a regional power pool or wholesale market. According to Basoudan, to hike the power generation capacity to the amount required by the year 2020, a $70 billion investment will be needed in the GCC region, the bulk of which will be in Saudi Arabia. The power generation demand of the projected Saudi population of 46 million by the year 2050 will be difficult to meet unless the energy sector is able to position itself now to meet the rise in consumption, according to Basoudan. “It is hoped that the countries in the region, particularly Saudi Arabia, will pursue aggressive power expansion plans. In the last few months, we are seeing in Saudi Arabia the comeback of commercial banks in support of energy projects, which is a good sign,” he said.
