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Saudi Arabia needs $80 billion for power growth by 2018
- 14 years ago (2010-08-02)
- David Flin
It has been reported that about $80 billion worth of investment is needed in Saudi Arabia by 2018 to meet rising power demands in the country. According to Euromonitor International, government sources estimate that an additional 3000 MW of electricity generation is needed annually to meet consumer demand. Its report added that Saudi officials aim to meet 20 per cent of its power generation from non-fossil fuel sources such as renewables and nuclear.
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Saudi Arabia’s economy is forecast to pick up during 2010, with real GDP growth of 3.7 per cent compared to 0.1 per cent in 2009, while population growth is likely to remain high at an annual average of nearly 2 per cent from 2010 to 2020, which will continue to place pressure on the electricity network.
Euromonitor said that to meet the growing demand, the government intends to make large scale investments in electricity infrastructure. Several new plants are under construction, often in partnership with the private sector, which is creating investment and business opportunities.
Saudi Arabia’s electricity network suffered blackouts and power shortages this year due to insufficient capacity and rising demand, a situation that Euromonitor sees continuing. It said that an electricity tariff rise in July had raised costs for commercial and industrial users, but was unlikely to have a major impact on the business environment as utility costs in Saudi Arabia remain low in global terms. The report added that power cuts are likely to continue, particularly in the peak summer periods, and this will continue to affect the industrial sector. Tariffs for residential consumers are unlikely to rise significantly, if at all, although there are campaigns to encourage greater energy efficiency.