Riyadh, Saudi Arabia — ESI-AFRICA.COM — 24 January 2011 – Top oil exporter Saudi Arabia intends to cut fossil fuel consumption within the next several decades, and is set to sign a major agreement with a local Saudi partner.
Reuters reports that although it sits on the world’s largest oil and gas reserves, Saudi Arabia is struggling to keep up with rapidly rising power demand, as petrodollars have fueled a Gulf-wide economic boom as well as a population boom.
Anne Lauvergeon, chief executive of the French nuclear reactor company Areva, told reporters here that the company would sign a partnership agreement with Saudi Arabia’s Binladin Group for nuclear and solar energy. She gave no specific figure.
“We think that in Saudi Arabia there’s an important market in solar thermal, and we are partnering with Saudi Binladin Group to develop this," Lauvergeon said.
The agreement with Areva, which is 90% controlled by the French government through direct and indirect holdings, was due to be signed yesterday.
Total power demand in the Saudi kingdom is expected to triple to 120GW by 2050 from around 40GW last year, said Hashim Yamani, president of the King Abdullah Atomic and Renewable Energy City.
“Nuclear and renewable energy will reduce dependence on fossil fuels by 2050,” Yamani said, adding that nuclear and renewable energy would free up more oil for exports. "Saudi will need to invest upfront in nuclear energy, but the oil saved will contribute significantly to the costs."
Given the high costs of developing nuclear energy, one rule of thumb in the industry has been that nuclear becomes a viable proposition when oil is US$90 per barrel, where current prices hover around for U.S. crude CLc1.
In 2010, Saudi consumed 3.4 million barrels per day of oil equivalent, Yamani said, but declined to comment on when the first nuclear power plant would be built.
There has been high interest in nuclear power on the Arabian pensinsula.