JEDDAH: The GCC countries need to focus on investments in renewable energy & technology as it is the future of global energy. At a workshop entitled "Oil Trade & Finance: Developments & Prospects for MENA" held in Dubai Monday, Dr Nasser Saidi, chief economist and head of External Relations, DIFC Authority, said "the future of global energy is not based on oil but rather on renewable energy, which is expected to triple by 2035. China is shaping this future and is pushing to expand the role of low-carbon energy technologies which will in turn drive the energy cost down, benefiting all countries. This is exactly why the GCC states need to focus on investments in renewable energy & technology given that they have significant clean energy resources in solar, wind and, carbon capture and storage." He said a number of dynamic and fundamental changes to the global oil and gas industry is happening. "Firstly, risk premiums associated with global uncertainties, have pushed crude oil prices up again. Secondly, as emerging markets took the driver's seat and became the main contributor to world GDP growth over the course of the global financial crisis, oil and gas flows have moved toward these emerging market economies, China in particular." The Middle East is home to two-thirds of the world's oil and gas proven reserves and its role as the largest oil exporter underscores the importance of the region given the rising demand globally for energy commodities. Recent years and months have seen high volatility in oil and gas prices, unrest in the region and rising demand from emerging market economies, highlighting the importance of maintaining oil and gas supply and financing to sustain growth in times of uncertainty. Nonetheless, "GCC petroleum consumption continues to remain high, with some states displaying the fastest yearly growth in energy demand in the world. Saudi Arabia actually uses more oil than Germany, despite having over 60 million less people. As a result of maintaining fuel subsidies, the GCC is extremely energy intensive when compared to industrial and developed countries around the world. This is not sustainable," he noted. "Today's discussions are an opportunity to highlight the challenges faced by the sector and propose solutions to address them. DIFC is proud to be hosting this event and it is committed to continue to be a platform where economic and financial issues facing the region and the world are discussed in an effort to develop this region's economies," Saidi said. Saudi Arabia is looking to diversify its domestic power industry away from its existing reliance on fossil fuels by investing heavily to make renewable energy the Kingdom's central source of electricity, a move that will extend the life of its oil fields, protect export earnings and pay environmental dividends. According to official estimates, Saudi Arabia's demand for electricity will increase threefold in just over 20 years, while calls on hydrocarbons needed to fire the Kingdom's turbines would more than double by 2028, with this likely to have a significant effect on export earnings. More than 8 million barrels of oil equivalent (BoE) a day will be required to ensure adequate capacity if the projections for 2028 electricity consumption are accurate, a significant increase on the 3.4m BoE used in 2010. Production will either need to be hiked dramatically - a move which would cut the life expectancy of local fields - or alternative power sources found.
