Fuel shortages and other hurdles will put new electricity generation targets in Saudi Arabia out of reach, analysts say, as the kingdom prepares to use more of its valuable crude oil to keep domestic lights on and air conditioners running.
Saudi Electricity Company (SEC), the state utility, said in its annual report on Wednesday that it wanted to add 12,043 megawatts of power capacity by 2015, equivalent to between four and eight power plants of the size commonly built in the Gulf.
The company plans to add 2,478mw this year alone, according to the report, which was published in Saudi newspapers. The country's current capacity is just under 40,000mw.
The plan faces a number of constraints, including shortages of fuel and manpower, and a lengthy contracting process, said Douglas Caskie, an expert in Gulf power at the international consultancy IPA Energy and Water Economics.
"That sounds very ambitious given the capacity developments so far," he said. "If you imagine 2,000mw as a really significant sized power plant, to replicate that, to run the procurement process for that in five years, four times over, is significant."
Saudi Arabia is in dire need of more electricity capacity. Power cuts are an annual occurrence at periods of peak demand in summer, and consumption is growing at one of the fastest rates in the world.
"There has been double-digit, compound growth in demand," Mr Caskie said. "And that's a combination of a number of factors including low tariffs - plus this planned development, the industrial cities and all the rest of it."
A shortage of natural gas remains a significant constraint, with Saudi Aramco, the state oil company, being pulled in different directions to supply gas to industrial plants and its own operations, JP Morgan Chase, the investment bank, said in a report last month.
"With gas growth uncertain over the next few years and a stated policy that petrochemicals get first priority for gas supplies, at least in over the next three years it appears that the kingdom's power generation will require an increasing amount of oil," wrote Lawrence Eagles, the author of the report.
The burning of oil to generate electricity emits more pollution, requires additional capital investment in power plant technology and reduces the country's exports.
By 2012, Saudi Arabia could be burning 900,000 to 1.2 million barrels per day (bpd) of crude oil to generate electricity in summer months, JP Morgan said. The country burnt as much as 470,000 bpd of crude oil last summer, according to FACTS Global Energy, a consultancy.
Saudi Arabia has few alternatives. Solar energy is not considered a realistic option because of its high cost, while the government is not pursuing nuclear energy, as the UAE is doing. Natural gas, the default option that fuels slightly less than half of Saudi power capacity, remains in short supply. Despite its vast oil reserves, the country has few reservoirs of natural gas found separately from crude oil deposits, so gas supplies decrease with OPEC quotas and other limits to oil production.
Saudi Aramco had hoped to find significant new reserves in the Rub al Khali in the south, but has little to show for its efforts after almost six years of drilling with foreign partners.
"They would need a significant find. I think they would need a game-changing find in the Empty Quarter if these things are going to be gas-fired," Mr Caskie said of the planned new power plants. "They'll burn fuel or crude oil."
@Email:cstanton@thenational.ae
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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The low down on MPS
What is myofascial pain syndrome?
Myofascial pain syndrome refers to pain and inflammation in the body’s soft tissue. MPS is a chronic condition that affects the fascia (connective tissue that covers the muscles, which develops knots, also known as trigger points).
What are trigger points?
Trigger points are irritable knots in the soft tissue that covers muscle tissue. Through injury or overuse, muscle fibres contract as a reactive and protective measure, creating tension in the form of hard and, palpable nodules. Overuse and sustained posture are the main culprits in developing trigger points.
What is myofascial or trigger-point release?
Releasing these nodules requires a hands-on technique that involves applying gentle sustained pressure to release muscular shortness and tightness. This eliminates restrictions in connective tissue in orderto restore motion and alleviate pain. Therapy balls have proven effective at causing enough commotion in the tissue, prompting the release of these hard knots.
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A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Duterte Harry: Fire and Fury in the Philippines
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Tips for SMEs to cope
- Adapt your business model. Make changes that are future-proof to the new normal
- Make sure you have an online presence
- Open communication with suppliers, especially if they are international. Look for local suppliers to avoid delivery delays
- Open communication with customers to see how they are coping and be flexible about extending terms, etc
Courtesy: Craig Moore, founder and CEO of Beehive, which provides term finance and working capital finance to SMEs. Only SMEs that have been trading for two years are eligible for funding from Beehive.
