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Saudi must rein in soaring power consumption

Top oil exporter Saudi Arabia needs to rein in fast-growing power demand that threatens to eat into future exports, Saudi Oil Minister Ali al-Naimi said in remarks published late on Wednesday.

An economic boom fuelled by record oil revenues this decade and subsidised domestic prices have led to a rapid rise in electricity consumption in the kingdom.

Gas supplies were insufficient to meet all demand for power, so Saudi Arabia burns oil products and some crude to meet demand.

"If this trend in power consumption in the kingdom continues it will impact the size of exports and will affect the kingdom's income, which necessitates the implementation of a national programme to rationalise power consumption," Naimi said in remarks published by the official Saudi Press Agency.

Power demand grew at an average of around 5.6 percent per year from 2001-2008, up from 3.6 percent in 1995-2000, due to industrial expansion and cheap prices, he said.

Demand for gas and refined products was also growing quickly, he said. Gas demand grew at around 7 percent per year and oil product demand around 5 percent per year since 1990.

Those rates outstripped the average real GDP growth of 3.4 percent since 1990, he said.

Saudi Arabia was studying the use of solar energy to replace oil and gas for power generation.


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Reuters
User Comments
Bill Reiswig
May 20, 2009 at 00:04
I think if the Saudi's were smart they would invest heavily in CSP -- Concentrated Solar Power plants, a type of baseload generating power plant that is quickly becoming on par with natural gas. As Oil depletes, it will go up and price and the Saudis can use the sale of exported oil -- this huge revenue to build a renewable energy infrastructure.
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