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Saudi in 10 GW renewables plan but oil and gas ‘needed for decades’

January 19, 2017

By Paul Homewood




The Saudis inject a bit of honesty into the debate:


PEI report:

Saudi Arabia’s first round of renewable energy tenders are expected to deliver up $50bn by 2032 to bankroll 10 GW of clean energy, the country’s energy minister announced yesterday.

However, Khaled Al-Falih also used the stage at Abu Dhabi Sustainability Week to stress that oil and gas had a role to play in the global clean energy narrative.

And he was adamant that without oil and gas being utilised alongside renewables, “we will have a shock to the global economy”.

Afterwards, some in the audience felt his speech was decidedly off-message for a sustainability conference. Others took a ‘well he would say that’ view. But some believed he had added a dose of realism to the clean energy debate.

Al-Falih, who is also the chairman of Saudi Aramco, said: “Sustainability needs to take advantage of all energy sources. Technology is a clear enabler for sustainability and there is substantial room still to be made to make oil and gas more sustainable.”

He told the audience: “I am a realist. As much as we hope for renewables, they will not penetrate fast enough – they will not bring the standards of living that people aspire to fast enough.”

And he maintained that “we are going to need cleaner oil and gas for decades to come”.

“If the oil and gas industry stops investing [in the power sector], we are going to have a shock to the global economy and people will then revert to less sustainable sources of energy.

"By constraining fossil fuels we are going to be a less sustainable global economy." He said that many people believe that bad news for fossil fuels is good news for renewables, "but we have found the opposite".


I have been arguing for a long time that it would be a disaster for the global economy if the oil and gas industry just switched and wound down, as people like Mark Carney seem to want.

We only have to look back to the 1970s to see the economic dislocation which followed the 1973 oil crisis.


But let’s also look at the Saudi plan to build 10GW of “clean energy” by 2032. I would guess most would be solar.

If we assume a generous capacity loading of 20%, this would be enough to generate 18 TWh a year. Saudi total generation in 2015 was 328 TWh in 2015, according to BP, and has been growing rapidly in recent years, up from 181 TWh ten years ago.

Therefore the new capacity will only contribute 5% of current electricity output, and almost certainly much less by 2032, when total demand is likely to have risen much more.

In terms of primary energy, electricity only accounts for 28% of total energy consumption. Therefore the contribution of the extra 10GW of renewable energy will actually be tiny.


Of course, it is in Saudi interests to argue for the continuation of oil production and export. But if solar power was so cheap and efficient, particularly in the Arabian Desert, surely Saudi Arabia would be keeping back all of its oil for export, and relying on solar for most of its energy?

  1. R2Dtoo permalink
    January 19, 2017 1:15 pm

    I take any estimates/projections/predictions by any government with a grain of salt. The driving forces behind the CAGW movement met at Davos last week and will work through the UN to capture the huge wealth associated with “power” no matter what else happens or is said. Renewable energy – whatever that is- could provide about 20% of the monies of the entire world economy to the global elite, and they want it. Energy also is the single greatest determinant of political control as it is the lifeblood of society. The geopolitical battle lines are being drawn, as Russia, China and the middle-East vie for control of Europe, Asia and Africa, an area already enmeshed in a tangled web of energy supply. NA (and SA and AU) could, and should, strive for energy independence asap. Nothing in the developed world is more important than an affordable and dependable supply of energy. No one will be in a position to help the rest of the world improve their lots without a base of energy.

  2. January 19, 2017 1:32 pm

    As you say, Paul, a touch of honesty in the debate.

    But the fact remains that post-industrial revolution civilisation has been built entirely on fossil fuels — coal, gas, oil. And every decade or so from the end of the 19th century we have been warned that Peak Oil is just round the corner. And every decade or so new finds and new techniques have proved that not to be the case.

    Fossil fuels will start to run out eventually but unless I am mistaken (Euan Mearns is probably the person to tell me if I am) this is a matter which is set to worry our 8x-great-grandchildren. The only conceivable reason for concern now would be if there were other pressing reasons for not using fossil fuels and increasingly the reasons given by eco-fanatics look less and less robust.

    I would suggest a visit to Pierre Gosselin’s NoTricksZone and a look at the deluge of papers he has referred to in recent weeks picking ever-increasing holes in the already threadbare idea that CO2 levels are anything to worry about. And that the next major temperature shift is as likely to be down as up and if it isn’t so what? “Runaway global warming” is a myth as the eco-activists know. If it weren’t it would have happened millennia ago — nature is not interested in where the CO2 comes from, only how much there is and there is more than enough evidence that past levels have been many times higher than today’s.

    So if there is any justification for spending trillions of dollars on decarbonising the world economy it is not that we should be subsidising pointless unreliable intermittent generation and in so doing penalising Theresa May’s “just about managing” while filling the pockets of the already rich and assorted chancers (whom I had better not name); that money would be infinitely better spent researching what is going to power our aircraft and our cars and our central heating in two or three centuries time because we have that long and those same 8x-great-grandchildren are not going to thank us for frittering away time and money on futile vanity projects and the misguided obsessions of eco-luddites and leaving them to play catch-up.

  3. January 19, 2017 1:44 pm

    Nice to see the two sides of the renewable debate coming together, both sides celebrate the eye-watering costs of renewables, the zealots take the enormous sums being spent as proof of unstoppable momentum, the sceptics take them as proof of futility.

  4. tom0mason permalink
    January 19, 2017 6:22 pm

    They could look to the epic failure of Masdar —

    Masdar City does have a good sized 10-megawatt ground mounted solar field, but that could end up being the only large scale, standalone renewable energy facility within its borders. The city is already grid-connected and it appears that planners are looking to leverage grid-supplied renewable energy as the city builds out, supplemented by rooftop solar, while leveraging its research and demo projects

    From — these people are still pushing this nonsense.
    The bottom line is that all the carbon intensive, energy intensive construction and communication costs are ignored. All that concrete, steel, aluminum, plastic, and glass. All the pipework, copper wires, plastic insulation, and asphalt road and side walks — ignored. Maintenance costs? Well I wonder what the true cost will be as the desert sands encroach.

    All-in-all after 6 years it is an expensive folly of the human ego.

  5. January 20, 2017 1:58 pm

    ‘And he was adamant that without oil and gas being utilised alongside renewables, “we will have a shock to the global economy”.’

    The people who thought this was ‘off-message’ – to quote the report – should tell us where they expect any electricity to come from when it’s dark and not windy in their 100% renewables fantasy world.

    In the absence of a satisfactory answer they should stop whingeing about other power sources.

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