To solve their energy needs, Saudi Arabia has announced plans to encourage private and public investment in the development of energy sources other then oil.
For 20 years the Royal family of Saudi Arabia intends to invest $80 billion and $240 billion in nuclear and solar energy, respectively. These sources should provide 15% of electricity needs of the state.
The transition is expected to occur quickly. The first nuclear reactor can be started just eight years. The development of nuclear energy will be for peaceful purposes only, say officials. The construction can be started by the end of the current year.
The total installed nuclear capacity in 20 years will amount to 18 GW, and solar power stations is planned to reach 40 GW.
Total investment in nuclear energy will amount to $80 billion, and this money will be built more than a dozen nuclear power plants.
With regard to investments in solar power plants, while planned to be spent on the development of this area of $240 billion But breakthrough technologies in the next decade must cut the costs in half.
Nuclear and solar power go well, and the two sectors became the basis of the energy strategy of Saudi Arabia. The country has more than 500 thousand square miles of arid lands, where the sun always shines. If the plans succeed, the needs of the Kingdom will be satisfied with a 30% renewable sources.
The problem is that power consumption in Saudi Arabia is growing faster than in any other country in the middle East, and almost all of it is compensated by oil and natural gas. Total electricity consumption in Saudi Arabia exceeds 200 billion kilowatt-hours a year, and it is expected that figure will double by 2030.
Most interestingly, consumption is growing at the expense of two sources: desalination of seawater and cooling of living spaces. Annually desalt more than 1.1 trillion liters of sea water, and this level will grow in 2 times in the next 10 years because of increasing population and industrialization.
More than 50% of energy consumption in the Kingdom have on the residential sector. Every year, each inhabitant consumes on average 6 thousand kilowatt-hour.
While these needs can be satisfied at the expense of oil and gas, but in the future the situation can become a big problem.
Without nuclear energy to bypass fails, as for sources of large area remote from human settlements, the source of nominal load to support.
Because Saudi Arabia is spending almost a billion barrels of oil per year to produce electricity, a qualitative change of energy balance is crucial for the economic future.
Much more profitable to sell oil to China or to the West than to burn it for energy production. The production of electricity thus subsidized by the government, which increases the cost and inefficiency to the detriment of overall GDP.
Officials fear that the current trend of increasing consumption can have a negative impact on the economy in the coming years, so that changes are needed now.
The Saudis are not alone in your desire among other countries in the region. The UAE is building four nuclear reactor because of increased consumption and depletion of oil fields. The 20-year plan Dubai expects 20% of energy supply will be ensured at the expense of a peaceful nuclear program. Recently in the UAE was opened the biggest solar plant in the world.
Its power was 1 MW, and the amount of investment is $600 million But four new nuclear reactors will be able to replace 200 such stations, and the amount of the required investment turns out giant.
Competition for contracts in Saudi Arabia are already very hard. In September 2013, GE Hitachi Nuclear Energy and Toshiba/Westinghouse signed a contract with Exelon Nuclear Partners to build a reactor.
Also the Kingdom has contracted for the French Areva and EdF. The authorities are working on deals with Russia, the Czech Republic and the UK. Perhaps even an agreement with China National Nuclear Corporation.
The reason for this number of agreements is quite simple. Officials seek to diversify the sources of development of nuclear power sector, so are looking for multiple suppliers of key components such as reactors, steam generators, turbines, etc.
Iran has positioned itself as a center for enrichment of uranium for many countries in the region, perhaps even for his enemies, such as Saudi Arabia. Thus, Iran is becoming a major nuclear player in the middle East.
But if the middle East becomes a nuclear region, how to develop the conflict of Sunnis and Shiites? In this potential group of nuclear States, Iran is the only Shia country. Saudi Arabia, Jordan, where they were recently discovered huge reserves of uranium, Qatar, UAE, Turkey is a Sunni state.
In addition, there are powerful terrorist organizations such as al-Qaeda and "Islamic state", who are also Sunni.
Therefore, further development of the dispute very difficult to predict.
But one thing is for sure: Saudi Arabia has the largest oil reserves in the world, in the near future will join the nuclear club.
Tags: assessment , economy , Near East