Saudi Arabia's Energy Presentation PDF

Before We Begin, An Interesting News! Announced September 3, 2021 by the Saudi Arab news Press Agency in behalf of the PIF. Dr. Tawfiq Aljohani 09/06/21 2 What Does This Mean? Carbon will be traded as credits. Efforts to establish...

Before We Begin, An Interesting News! Announced September 3, 2021 by the Saudi Arab news Press Agency in behalf of the PIF. Dr. Tawfiq Aljohani 09/06/21 2 What Does This Mean? Carbon will be traded as credits. Efforts to establish a Cap & Trade carbon market in the region? Carbon market: every power-producing utility must either: o Reduce CO2 production within its premises at certain levels; or, o Buy carbon credits from other utilities/gov. to avoid penalties. Eventually, energy market will be forced to reduce dependence on fossil fuels for power generation. Arab news Dr. Tawfiq Aljohani 09/06/21 3 Do We Need This? Short answer: Definitely! Dr. Tawfiq Aljohani 09/06/21 4 Do We Need This? Short answer: Definitely! Dr. Tawfiq Aljohani 09/06/21 5 Do We Need This? Short answer: Definitely! Dr. Tawfiq Aljohani 09/06/21 6 Data Can be Deceiving a Bit Carbon emission has many indications o Population. o Quality of life. o Energy infrastructure. Do we emit more carbon than the USA? The answer is NO. But we are among the highest emitters (per carbon footprint). China is #1 emitter, USA is #2, India#3. We are making it into the top 10! However, worked has resulted in good outcomes for us by numbers! Dr. Tawfiq Aljohani 09/12/21 7 Data Can be Deceiving a Bit Our global share is WAY lower than the US, China, Russia. But we are among the top 10, per capita footprint index. Success: We have reduced our global share in 2018-2020 (our curve is going ) Dr. Tawfiq Aljohani 09/12/21 8 Energy’s share of the problem ~ 74% Dr. Tawfiq Aljohani 09/12/21 9 All in All, We Are Moving on the Right Pathway! IEA: International Energy Agency Dr. Tawfiq Aljohani 09/12/21 10  Key Drivers for Sustainable Energy Dr. Tawfiq Aljohani 09/12/21 11 Drivers for Sustainable Energy Three pillars of energy for sustainable development: o Energy Security. o Energy and Environment. o Energy for Quality of Life. UNECE Dr. Tawfiq Aljohani 09/12/21 12 Drivers for Sustainable Energy Three pillars of energy for sustainable development: o Energy Security. o Energy and Environment. o Energy for Quality of Life. UNECE Dr. Tawfiq Aljohani 09/12/21 13 Pillar #1: Energy Security Deals with economic aspects of energy security from a national perspective. It includes accessibility to energy supplies o Import, export, and transit considerations. Shaped by o Social, economic, environmental and technological factors. o Energy MUST make optimal contribution to these factors within a country. Dr. Tawfiq Aljohani 09/12/21 14 Pillar #1: Energy Security Energy Security: ‘Securing the energy needed for economic development’. The IEA defines energy security as “the uninterrupted availability of energy sources at an affordable price”. Energy security has many aspects: o Long-term energy security: deals with timely investments to supply energy in line with economic developments and environmental needs. o Short-term energy security: the ability of the energy system to react promptly to sudden changes in the supply-demand balance. Dr. Tawfiq Aljohani 09/12/21 15 Pillar #1: Energy Security Energy is the cornerstone of civilization o Daily life depends ENTIRELY on energy. o Energy required in hospitals, schools, grocery stores, retail shops, offices, sports facilities and cultural centers. o With rising prosperity and expanding commercial activity comes an increased demand. o Strong middle-class growth in non-OECD nations increases energy demand worldwide by more than 35 percent. o Improving building efficiencies lower energy demand in OECD countries by about 5 percent. Dr. Tawfiq Aljohani 09/12/21 16 Pillar #1: Energy Security Dr. Tawfiq Aljohani 09/12/21 17 Energy Demand in Saudi Arabia 1990-2018 Dr. Tawfiq Aljohani 09/12/21 18 Energy Demand in Saudi Arabia 1990-2018 Dr. Tawfiq Aljohani 09/12/21 19 Energy Demand in Saudi Arabia 1990-2018 IEA: International Energy Agency Dr. Tawfiq Aljohani 09/12/21 20 Drivers for Sustainable Energy Three pillars of energy for sustainable development: o Energy Security. o Energy for Quality of Life. o Energy and Environment. UNECE Dr. Tawfiq Aljohani 09/12/21 21 Pillar #2: Energy for Quality of Life Overall goal: to improve living conditions of all citizens by providing access to clean, reliable and affordable energy, food, and water. Indicators within this pillar include o Access to energy services: Energy/electricity services per capita (efficiency adjusted energy consumption, J/capita/year). o Energy affordability: total energy expenditures per GDP per capita. o Food Security: Share of calories from non-staple food (%). Dr. Tawfiq Aljohani 09/12/21 22 Pillar #2: Energy for Quality of Life Food prices and access to clean water give an indicator to the sustainability of energy as well as food systems. Apart from affordability, the benefits of clean energy on Quality of Life are: o Not properly quantified in a mathematical modelling and optimization approaches. o As a result, is difficult to equate the benefits of clean energy on either social or economic scales. Dr. Tawfiq Aljohani 09/12/21 23 Pillar #2: Energy for Quality of Life Aims to coordinate the Food Water Energy Nexus UNECE 2017a Dr. Tawfiq Aljohani 09/12/21 24 Drivers for Sustainable Energy Three pillars of energy for sustainable development: o Energy Security. o Energy for Quality of Life. o Energy and Environment. UNECE Dr. Tawfiq Aljohani 09/12/21 25 Pillar #3: Energy & Environment Overall goal is to ‘Limit the impact of energy system on climate, ecosystems and health’. Energy emissions contribute to ~ 74% of total greenhouse gas emissions. The energy sector needs to reduce its carbon footprint to support climate change mitigation efforts. Dr. Tawfiq Aljohani 09/12/21 26 Pillar #3: Energy & Environment The Energy and Environment pillar also includes further nexus topics such as: o Efficient use of water in the energy sector o Reduction in transport emissions, and air pollution caused by energy generation and consumption. Many key points drive environmental change. Dr. Tawfiq Aljohani 09/12/21 27 Drivers to Environmental Change 1. Population growth, 2. Economic development, 3. Urbanization, 4. Technological advancement, 5. Climate change. Dr. Tawfiq Aljohani 09/12/21 28 #1: Population Growth More people means more energy requirement; thus, more pressure on environment. 2019’s population: 7.7 billion o Higher than previously projected. o Current estimates: to be around 10 billion in 2050. Population growth influence other factors o Conflicts over limited resources. o Rapid and unplanned urbanization. o Increased ecological and carbon footprints. Dr. Tawfiq Aljohani 09/12/21 29 #1: Population Growth So, is the problem with population growth?? Dr. Tawfiq Aljohani 09/12/21 30 #1: Population Growth So, is the problem with population growth?? Short Answer: NO! Population growth is normal, both mathematically and logically. History tells us: with population increase, mankind gets creative o Provide solutions, although solves partially not fully (i.e. tech advances) o We are currently doing research to find solutions (continued process) The problem is with FAST & RAPID population growth, not the growth itself! Dr. Tawfiq Aljohani 09/12/21 31 #2: Economic Development Better human welfare higher energy needs. Energy is the most important factor in an economic development o The base for a higher quality of life. o No energy, no development. It’s a two-way relationship o Economic growth takes precedence over energy consumption. o Energy consumption boosts the economic growth. The more developed a country, the higher its per capita of energy: o high concentration of industry, high levels of car ownership and high domestic usage from homes filled with appliances. Dr. Tawfiq Aljohani 09/12/21 32 #2: Economic Development So, is good economy bad for the environment? Dr. Tawfiq Aljohani 09/12/21 33 #2: Economic Development So, is good economy bad for the environment? Short Answer: It Depends! Usually with good economic stance, comes waste and extravagance! Energy must be smartly control o Influence consumers to achieve good energy habits (the more you use, the more you pay to compensate) o Influence energy consumption to achieve productivity. o Establish smart cities and communities to achieve sustainability. The problem is NOT with good economic development, but on how to OPTIMALLY manage it to serve your interest while you be an environmentally friendly. Dr. Tawfiq Aljohani 09/12/21 34 #3: Urbanization Migration trend: moving from rural to urban areas. This creates a pressure on energy infrastructure and environment. Aggregate carbon emissions on lower geographic dispersion. United Nations (2014, P. 13) Dr. Tawfiq Aljohani 09/12/21 35  #3: Urbanization Urban areas account for o Over 70% of CO2 emissions (due to energy consumption). o Urban expansion is responsible for 5% of the annual emissions from land use change (deforestation). “The Role of Urbanization in the Global Carbon Cycle” Galina Churkina Dr. Tawfiq Aljohani 09/12/21 36 #3: Urbanization So, is urbanization bad for the environment? Dr. Tawfiq Aljohani 09/12/21 37 #3: Urbanization So, is urbanization bad for the environment? Short Answer: It Depends! Mega cities are increasing in numbers, which is a concern. But if optimally planned, mega cities offer us a golden chance: o Contribute to wealth creation (attract skills, increase productions...etc.) o Implement energy efficiency faster and easier (potentially). o Establish smart cities and communities. The problem is NOT with urbanization. The problem is with the UNPLANNED urbanization. o Unregulated cities will be less attractive, more polluted, congested and inefficient in the use of resources. o For short run: it is less costly for governments to unplan the urbanization. o For medium and long runs: the cost to society, economy and environment WILL BE dire. Dr. Tawfiq Aljohani 09/12/21 38 #4: Technological Advancement Technology have led to positive impacts : o Accelerated economic development. o Lifted the standard of living for billions of people. o Build a more circular economy. o Create less resource-intensive processes. o Accelerate more effective resource innovation. o Allow efficient/smart energy consumption (e.g. energy star appliances) But also contributed to climate change o Higher energy consumption, even with recent increased efficiency. o Faster resource depletion (e.g. 35 materials to produce a smartphone). o Electronic waste is  Hazardous (contains toxic materials).  Cost too much to dispose (i.e. $66 billion/yr in 2019).  Short of 20% are recycled! Dr. Tawfiq Aljohani 09/12/21 39 #4: Technological Advancement So, are tech advances bad for the environment? Dr. Tawfiq Aljohani 09/12/21 40 #4: Technological Advancement So, are tech advances bad for the environment? Short Answer: It Depends! Have both positive and negative impacts. Most of the negative sides come from tech companies o Still use toxic materials for manufacturing. o Factories in countries with no or less regulation (e.g. Apple’s in China). o Care more about profits only, less or no attention to other factors. Consumers have their share of the problem o Need to Reduce, Reuse and Recycle (the three Rs). The problem is NOT with tech advances, but with the types of regulations and laws that govern production, utilization and disposal phases of a technology. Dr. Tawfiq Aljohani 09/12/21 41 #5: Climate Change The most important driver in the energy & environment pillar. The reason behind our endeavor to reshape our energy. Climate change is the most dangerous driver o Poses risks to human societies through impacts on food, water, security, and health. o Destroys Earth’s ecosystem and atmosphere. o Directly and indirectly impact economic development. Dr. Tawfiq Aljohani 09/12/21 42 #5: Climate Change IPCC: the Intergovernmental Panel on Climate Change is an intergovernmental body of the United Nations mandated to provide objective scientific information relevant to understanding human-induced climate change. Dr. Tawfiq Aljohani 09/12/21 43 #5: Climate Change The IPCC-AR5 states that ‘the warming of the climate system is unequivocal, as evidenced by observations of increases in global temperatures, widespread melting of snow and ice and rising sea level’. IPCC also notes that human influence on the climate system is clear, and that ‘many aspects of climate change and associated impacts will continue for centuries, even if anthropogenic emissions of greenhouse gases are stopped’ (IPCC 2014, p. 16). Dr. Tawfiq Aljohani 09/12/21 44 #5: Climate Change So, is climate change bad for the environment? Dr. Tawfiq Aljohani 09/12/21 45 #5: Climate Change So, is climate change bad for the environment? Short Answer: DEFINITELY! Climate change IS THE MAIN REASON why mankind must reshape its energy production and utilization. Failure to do this will cost mankind dearly. A main reason why you are taking this course “Alternative Energy”: As a consumer, you have to do your part (the three Rs). As a mentee, you need to know about “the other options”. As an electrical engineer, you have to provide solutions. Dr. Tawfiq Aljohani 09/12/21 46  Saudi Arabia as a Model for Environmental Change Dr. Tawfiq Aljohani 09/12/21 45 Saudi Arabia as a Model for Env. Change 1. Population Increase Saudi Arabia’s population growth rate o Average yearly rate 1.7% [2019, stats.gov.sa]. o Dropped from 2.52% in 2017 [2017, stats.gov.sa]. o Average worldwide population yearly increase is 1.2% [2019, world bank]. o Our growth rate is slightly above average, but within reasonable limits. o Our growth rate is 0.295% higher than growth rates in the MENA region. Dr. Tawfiq Aljohani 09/12/21 48 Saudi Arabia as a Model for Env. Change 2. Economic Development Saudi Arabia’s GDP is one of the most stable globally. 2030 vision to diversify the country’s input incomes. GDP is projected to increase [2022-2026]. Saudi Arabia GDP [1986-2026*] Statista.com Dr. Tawfiq Aljohani 09/12/21 49 Saudi Arabia as a Model for Env. Change 3. Urbanization Saudi Arabia has one of the highest urbanization rate globally. Estimated as ~85% of the total population. High population density in several cities only! Since 1980: major cities have had three digits % : o Riyadh’s population increased 650% [1 mil~7.5 mil]. o Jeddah’s population increased 489% [0.850 mil~4.91 mil]. o Makkah’s population increased 316% [0.51 mil~2.08 mil]. o Medina’s population increased 322% [0.451mil~1.9 mil]. Dr. Tawfiq Aljohani 09/12/21 50 Saudi Arabia as a Model for Env. Change 3. Urbanization Such increase poses both opportunities and challenges. Opportunities o Establish smart cities and smart communities at a faster rate. o Business growth wealth growth. o Implement energy efficiency and building codes standards easily. Challenges o High carbon emissions footprint. o Need for urgent expansion of the energy infrastructure. o Resource depletion at a higher rate. o Traffic congestion (more CO2 into the air). o Income inequality old cars, old appliances (not energy star). Dr. Tawfiq Aljohani 09/12/21 51 Saudi Arabia as a Model for Env. Change 3. Urbanization Dr. Tawfiq Aljohani 09/12/21 52 Saudi Arabia as a Model for Env. Change 4. Technological Advancement Saudi Arabia: goals to be the tech leader in the MENA region. 2030 Plan: large-scale integration of high techs across the country. Saudi Arabia ranks 38th on the global competitiveness index o Jumped 16 positions all at once from last year. o Due to the advances in information & communication techs. Many other good rankings: mobile internet speed, innovation index, digital transformation …etc. STILL, there are so much to do to reach the top! Dr. Tawfiq Aljohani 09/12/21 53 Saudi Arabia as a Model for Env. Change 4. Technological Advancement Dr. Tawfiq Aljohani 09/12/21 54 Saudi Arabia as a Model for Env. Change 4. Technological Advancement Dr. Tawfiq Aljohani 09/12/21 2 Saudi Arabia as a Model for Env. Change 4. Technological Advancement From energy point of view; tech advances have their share in increased energy demand in the country. To compensate, plans announced to provide energy from carbon- free resources. Neom: largest hydrogen plant in the world o Supply 650 tons of carbon-free hydrogen per day to global transportation market. o Offset 3 million tons of Co2 emissions per year. Renewable energy projects on large-scale levels o Will cover it in detail in this course! Dr. Tawfiq Aljohani 09/12/21 55 Saudi Arabia as a Model for Env. Change 5. Climate Change Saudi Arabia is among the top 10 in carbon footprint o Largely due to the previous 4 factors. o Most of our generation stations are fossil fuel-based plants. Recent intensified efforts to be leaders in green energy. o 2030 plan set goals for large-scale alternative energy projects. o NEOM and THE LINE projects. Combat deforestation (vegetation restoration) o A 10 Billion-tree planting plan. o Strict laws for bucking cut (cutting trees for firewood). o Strict laws to preserve wildlife habitat. Dr. Tawfiq Aljohani 09/12/21 56 Saudi Arabia as a Model for Env. Change 5. Climate Change Dr. Tawfiq Aljohani 09/12/21 57 Saudi Arabia as a Model for Env. Change 5. Climate Change But water is needed to achieve such ambitious plans! Huge water stress in Saudi Arabia o Rainfall down in many regions (drought), except Sarawat mountains. o 2006 Stat: 98% of our water comes from underground resources (57% of it is non-renewable). Gov. Act: strict regulations on farming and use of water o Reduce hectarage under wheat by 94% from 523,000 ha in 2004 to 33,700 ha in 2030. o Stop alfalfa and other high water consuming fodder crop productions except where they utilize treated wastewater. o Promote the development of feed industries using agricultural waste products. o Improve irrigation efficiency from 45% in 2010 to 65% in 2030. Dr. Tawfiq Aljohani 09/12/21 58  How to Evaluate These Pillars on a Higher Level? Dr. Tawfiq Aljohani 09/12/21 59 Evaluation Criteria for the Three Pillars Mathematical models (Algorithms) are necessary o To govern the relationship between different variables. o Utilize the appropriate methodology or design a unique one. Simulation models with multi-input variables to get multi-output results. Most importantly, define: o The system architecture of the study. o The input variables “appropriately”. o The desired output of your study “clearly”. o Correlation between input variables with your desired outcomes. Input data injection o If there is no sufficient data, try realistic assumptions! Evaluation of the obtained results Provide a formal report with sufficient analysis! Dr. Tawfiq Aljohani 09/12/21 60 Integrated Framework for the Three Pillars Dr. Tawfiq Aljohani 09/12/21 United Nation 61 Simulation Tools Tens of software tools are available to perform your study o Comes at different packages, capabilities, performance …etc. o Some are available for free to researchers. o Others require subscriptions. Personal recommendation (from my previous work) o MATLAB. o Python Environment. o OpenDSS (of Electric Power Research Institute). o PowerWorld Simulator. o Vensim (powerful dynamic tools, the best for such studies!). o GREET model (of Argonne National Laboratory). Dr. Tawfiq Aljohani 09/12/21 62 Example of a Sustainability Simulation Sustainability of EVs & HEVs Over the Long Run A previous study your instructor did as a graduate course project (MS green tech degree). Assessed the sustainability of EVs & HEVs market for 2010-2050. Utilized Vensim to model the car market. Incorporated several social, financial, environmental and industrial factors. Defined the correlations among those factors Mathematical algorithms to assess relationship among factors. Input data from governmental and market sources. Dr. Tawfiq Aljohani 09/12/21 63  Example of a Sustainability Simulation Sustainability of EVs & HEVs Over the Long Run Actual Driving Range Fixed Prices Variable Prices Battery Rating Average Family size Difference Effect of Driving Range Effect of Fixed Prices Effect of Variable Family size effect Prices Total Adopters Adopters on Adopters on Driving Range Adopters on Price Family size Potential Adopters Adopters Total Population Rate of Adoption Adoption Fraction Adopters on Adopters on Recharge Time Infrastructure Contact Rate Effect of Effect of Infrastructure Recharge Time Number of Actual Recharge Time Charging Points Dr. Tawfiq Aljohani 09/12/21 64  Saudi Arabia Energy Market SWOT Analysis Dr. Tawfiq Aljohani 09/12/21 2 Saudi Energy Market SWOT Analysis 1. Strengths The world’s largest oil producer (main player of OPEC). The world’s largest proven oil reserve (one-fifth of global reserve). Leader in global energy market. Large basins of mineral resources & natural gas. Ideal renewable energy resources. Access to low-cost oil and natural gas. Superior energy Infrastructure World’s leading companies in conventional energy sources. 1,106 circular km of HV lines [356km underground, 750km overhead]. GCCIA HVDC project. Internal HVDC links (e.g. Medina-Tabuk HVDC project). Dr. Tawfiq Aljohani 09/12/21 65 Saudi Energy Market SWOT Analysis 2. Weakness Scarcity of water resources. High dependence on governmental subsidies. Low availability of data to researchers. Heavy dependence on fossil fuel-based plants for power generation. Low energy efficiency. Limited national research laboratories. High carbon footprint per capita. Low public awareness, leading to wasteful energy consumption. Most power outages are within the power distribution grid. Power grid is still vertically integrated monopoly. Dr. Tawfiq Aljohani 09/12/21 66 Saudi Energy Market SWOT Analysis 3. Opportunities Unlimited governmental support to energy projects. High potentials for renewable energy resources 2nd in global solar irradiation. Vast windy regions (especially on the shores of Red Sea and Arabian Gulf). Abundant geothermal resources. Accession to WTO. Newly introduced environmental regulations. Strong oil and natural gas demand on global level. More deregulation and privatization. Increased dependence on national industry for power equipment. GCCIA project o Potentially selling electricity as a product to Europe and Central Asia. Dr. Tawfiq Aljohani 09/12/21 67 Saudi Energy Market SWOT Analysis 4. Threats Potential energy price hikes. High annual demand growth [~8% annually, very high]. High urbanization rate [~ 85%, very high]. Oil and natural gas prices are volatile. Operate oil-fired plants to generate electricity, [oil accounts for over 75% of total economy]. Lack of diversity in the generation portfolio. Substantial number of generation units are near or over its useful life. Dr. Tawfiq Aljohani 09/12/21 68  Example of an Opportunity Within The Saudi Energy Market The GCCIA HVDC Project Dr. Tawfiq Aljohani 09/12/21 2 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market GCCIA HVDC Project: o Stands for the Gulf Cooperation Council Interconnection Authority (GCCIA) High Voltage Direct Current Project. o 400kV interconnection grid between Saudi Arabia, Kuwait, Bahrain, Qatar and United Arab of Emirates (UAE). o 900 km of overhead lines, seven 400kV substations, a 1800MW three-pole back-to-back HVDC converter station and a submarine cable to Bahrain [2017 data]. Dr. Tawfiq Aljohani 09/12/21 70 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market Energy exchange among the Arabian Gulf countries. Reduce (shave) peak demands, especially during summers. Control of energy grids with different frequencies o Only Saudi Arabia is 60 Hz. o Rest of GCC states are 50 Hz. o Exchange of energy is allowed via high voltage power electronics circuits. Environmentally friendly (more than the AC system) o Provides more energy per square meter over greater distances than the AC system. Lower losses, higher profits. Postpone energy expansion projects. Reduce carbon emissions. Dr. Tawfiq Aljohani 09/12/21 71 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market Not so long ago, we had four separated (not connected) national grids: o WOA. o COA. o EOA. o SOA. Each one was operating as a stand-alone grid. Dr. Tawfiq Aljohani 09/12/21 72 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market Internal interconnection projects started less than a decade ago. Integration of the four grids into one unified national grid. Allow further energy exchange with the GCC countries. E.g.: o Medina-Tabuk HVDC Line. o Medina-Riyadh HVDC Line. o Makkah-Riyadh HVDC Line. Dr. Tawfiq Aljohani 09/12/21 73 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market Aljohani, T.M.; Alzahrani, A. The Operation of the GCCIA HVDC Project and Its Potential Impacts on the Electric Power Systems of the Region. Dr. Tawfiq Aljohani 09/12/21 74 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market Aljohani, T.M.; Alzahrani, A. The Operation of the GCCIA HVDC Project and Its Potential Impacts on the Electric Power Systems of the Region. Dr. Tawfiq Aljohani 09/12/21 75 The GCCIA HVDC Project A Golden Opportunity to the Saudi Energy Market Allow us to connect to Europe, Central Asia, and Africa. Allow us to sell energy as a product. Main points were through Egypt, Jordan and Yemen. Due to political conditions, Tabuk-Egypt HVDC was postponed in 2011 o Discussion returned in 2019. o Project to receive bids soon. Dr. Tawfiq Aljohani 09/12/21 Fig. from Zhang et al., 2017 68