Gas resources boost Saudi’s energy efficiency
Davos, Switzerland, January 21, 2014
Energy efficiency and diversity of fuel mix are rational choices; and there are countless examples and good practices that can be found around the globe, added Khalid Al-Falih, president and chief executive officer of Saudi Aramco.
He was speaking ahead of the World Economic Forum set to open tomorrow (January 22) in Davos, Switzerland.
With that in mind, efficiency and diversity become key aspects of energy policy in many countries around the world, irrespective of their resource endowment, he noted.
“Looking at Norway as an example of a major oil and gas producer – the third largest exporter of energy after Russia and Saudi Arabia – the country has actively promoted investment in renewable energy and energy efficiency through a dedicated government agency,” Al-Falih said.
“Similarly in Australia, another resource-rich country endowed with coal and natural gas, support for the development of renewables and energy efficiency has been enhanced through mandatory renewables targets, feed-in tariffs and energy efficiency regulations.
“Looking closer to home in the Arabian Gulf region, the UAE imposed a mandatory rating system for construction of energy efficient buildings in Abu Dhabi, and created a free zone dedicated to the development of green technologies and energy conservation in Dubai,” he added.
“Like those examples, and many more, Saudi Arabia recognizes the importance of energy efficiency and ensuring a sustainable and diversified energy mix. This becomes of higher importance to us with the high pace of growth we are experiencing. Saudi Arabia has been able to sustain high economic growth rates over the past decade, which contributed to an unprecedented increase in demand for energy,” Al-Falih highlighted.
Saudi Arabia registered higher economic growth in 2011 and 2012 than any other member of the G20 with the exception of China. Robust growth is forecast to continue as the country pursues an ambitious agenda of raising living standards for its citizens, diversifying the economic base, creating sustainable jobs and enhancing the competitiveness of the economy while sustaining our natural resources.
However, diversifying our economic base from a dependence on crude oil exports should not be construed as turning away from leveraging the Kingdom’s “energy advantage”, Al-Falih pointed out.
“In fact, manufacturing investments that add value and create jobs will continue to be a main pillar in the Kingdom’s economic development,” he said.
Delivering safe, secure and environmentally sustainable energy to foster this growth is of paramount importance. Saudi Arabia is pursuing a diverse set of demand-side and supply-side options to meet this challenge.
On the demand side, a Saudi Energy Efficiency Center (SEEC) was established to roll out energy efficiency measures in industry, transport and buildings. In particular, SEEC has already established minimum standards for air conditioning units in a bid to reduce the growth of peak energy demand.
On the supply side, the National Power and Water efficiency programme is driving efficiency improvements in existing plants and developing a long-term plan based on an optimum fuel mix consisting of conventional natural gas, liquid hydrocarbons and renewables. Currently, natural gas accounts for almost 50 per cent of power generation, which is higher than figures observed in developed nations such as the UK and the US.
Moreover, promising unconventional gas discoveries in Saudi Arabia will further increase the percentage of gas in power generation, thus further improving generation efficiency while meeting our future energy demands.
“Saudi Aramco, as a major contributor to the economy and a major energy user in its own right, is a leader in efforts to improve energy efficiency. This is demonstrated through the significant actions undertaken in all its operations,” said Al Falih.
“On average, since the year 2000, the company has been able to achieve 2 per cent annual reduction in energy intensity in industrial facilities, which resulted in savings of around 130 thousand barrels per day of oil equivalent. This was realized through various initiatives such as cogeneration, retrofitting industrial equipment and process enhancements.
“Furthermore, our cogeneration facilities provide an additional layer of reliability to our critical infrastructure, while complementing the overall efficiency improvement of the country’s power system.”
In addition, the company recently launched its own “lead-by-example” programme to improve energy efficiency in its nonindustrial facilities, targeting a minimum of 35 per cent improvement by 2020.
“As highlighted earlier, good practices in energy efficiency and diversity can be found in many countries around the world, irrespective of their resource richness,” Al-Falih said.
“Therefore, from Saudi Arabia’s perspective, as we progress in the development of our energy policy, we will continue to draw upon lessons learned from our own experience as well as from the international community, in order to drive a continuously competitive and prosperous economy. Saudi Aramco will continue to play a key role in these endeavours.” – TradeArabia News Service