THERE are more Saudis than ever before and more of us live in cities than ever before. This is set to continue: Our children and grandchildren will almost certainly be saying the same thing. Continued stability has provided the preconditions for long-term economic growth. The Kingdom's gross domestic product has increased by about $520 billion during the past decade. During the same period, Saudi Arabia's population has grown by around 8 million inhabitants. The Central Department of Statistics & Information estimated that the country's population reached more than 30 million residents in 2014. Prosperity and population growth have gone hand-in-glove with a move from country to city. The Ministry of Municipal and Rural Affairs has reported that urbanization increased from 48 percent in the 1970s to around 80 percent in 2000; with an expectation that the figure may reach 88 percent by 2025. Across the world, greater prosperity, greater population and greater growth of cities has also meant a greater need for power. Saudi Arabia is no exception. The Kingdom's net electricity consumption has more than doubled since 2000 according to the US Energy Information Administration. In August this year, Saudi Electricity Company (SEC) reported its highest peak electricity load: 62,260 megawatts (MW), a rise of ten percent in August 2014. Two aspects of Saudi Arabia's energy sector stand out. Per capita consumption is twice the world average — according to Abdulrahman Ba-Ashin, head of the Middle East Center for Economic Studies — with an annual growth in demand of 6 to 8 percent. In addition, Saudi Arabia is one of a handful of countries that burn crude oil directly for power generation. The result is that the Kingdom is consuming oil, its principal and finite source of revenue, in ever more significant quantities. In July 2014 alone, 0.9 million barrels per day of crude oil were burned to generate power. This oil is being diverted from the petrochemicals and refining industries, where it could be developed into higher value-added downstream products for export. The need to ensure oil revenues, while meeting the demand for electricity driven by urbanization and population growth, means we need to look at alternative ways to generate power. Typically renewable energy, especially solar, springs to mind. By definition, renewable energy has the advantage of being infinite. In addition, renewables offer the environmental dividend of being clean, with low or zero greenhouse gas emissions at the point of generation. Countries across the world, however, are finding it challenging to make renewable energy economically viable, especially in the short term. Saudi Arabia's abundance of oil exacerbates this problem, especially at a time of exceptionally low oil prices. The Kingdom, though, is fortunate to have enlightened leadership at the heart of its power generation sector. Its leaders are continuously looking to develop more nuanced ways to strike a balance between the need for power and the need to export oil. Ziyad Bin Mohammed Al-Shiha has been SEC's Chief Executive Officer (CEO) since January 2014. The utility accounts for 85 percent of the country's public power supply; but SEC's importance extends beyond Saudi Arabia's borders. Having described SEC as, “the battery and the energy that powers the Kingdom, for the Kingdom to power the entire world,” this is something Al-Shiha clearly grasps. Al-Shiha has been a long-term proponent of reducing the amount of fossil fuel used for power generation. In 2011, while executive director for power systems at Saudi Aramco, Al-Shiha told a conference, “Between … increasing the efficiency of the supply and enhancing the efficiency of the demand, I think the Kingdom can save thousands and hundreds of thousands of [barrels of] oil equivalent.” Pursuit of efficiency is the hallmark of his team's approach at SEC. The utility has focussed on improving the fuel efficiency of its existing power stations and specifying more fuel efficient equipment when constructing new ones. For example, converting a power station using simple cycle equipment to one using combined cycle technology can increase efficiency by circa 20 percent. So SEC is pursuing a program to make these conversions. The majority of SEC's older power stations — which burn gas, diesel or crude oil — are suitable. Adjunct to the conversion program, SEC is ensuring that new simple cycle plants are engineered with future conversion to combined cycle in mind. As well as looking at the efficiency of power stations at the individual level, SEC is looking at its asset base as a whole, to see where greater interconnectivity of networks can make the same or greater amounts of power available without increasing the fuel burned to generate it. The strategy is bearing fruit. SEC data shows a 1 percent increase in thermal efficiency — across all types of power generation — between 2013 and 2014. This saved the equivalent of 12.1 million barrels of oil. The utility envisages that, when complete, the program to enhance the efficiency of its older generation assets will save approximately 200 million barrels of fuel annually. Al-Shiha's and his team's drive for efficiency has not come at the expense of the renewable energy. Although the Kingdom has reappraised the scale of its solar power program in light of the fall in oil prices, SEC and Saudi Aramco — where Al-Shiha established the Renewable Energy Division — will implement a circa 1,000MW solar programme in the next five years. A new power station at the western Red Sea port of Duba in many ways encapsulates the approach of Al-Shiha and his team. Dubbed ‘Green Duba', the project is Saudi Arabia's first integration of a solar field with a combined cycle power station. Green Duba will have the capacity to generate power equivalent to that sufficient for around 600,000 homes — for a year. Al-Shiha summed up the project thus, “We expect the plant to provide cost-efficiencies over its lifecycle, along with the fuel flexibility and solar capabilities needed to support the kingdom's fuel conservation and renewable technology initiatives.”
— Mazen A. Alami joined Black & Veatch as Managing Director for the Middle East in September 2012. A veteran of the energy industry, he brings with him more than 35 years of experience in the power and oil and gas
