Saudi Arabia reveal renewable energy ambitions

Saudi Arabia Renewable Energy

The world's largest oil producer has announced it plans to join the International Renewable Energy Agency (IRENA).

Saudi Arabia follow fellow new members South Africa, the Kyrgyzstan and Saint Vincent and the Grenadines, as global awareness of climate change continues to rise. The UN climate change summit in Copenhagen did manage to convince a number of previously sceptical countries to commit to national climate change policy, if little else.

The announcement was made at the third preparatory session of IRENA, which adopted a budget of US$13.7 million for the agency for 2010.

Dr Sultan Ahmed Al Jaber, the CEO of Masdar said in comments at a press conference that the decision to join IRENA was indicative of the increasing support to the cause of renewable energy.

The pursuit of renewable energy

Helene Pelosse, IRENA's interim director general added that it was further evidence of the narrowing differences between the oil producers and consuming countries in the pursuit of renewable energy.

However the kingdom's traditional energy vision falls directly in conflict with their renewable energy plans. Saudi Arabia is predicted to account for about 21 percent of Middle East oil demand by 2013, while providing nearly 40 percent of supply, according to a report released at the beginning of January.

The report added that regional oil use is seen hitting more than 11 million barrels per day in 2009, rising to more than 12 million barrels per day (bpd) by 2013, the latest Saudi Arabia oil and gas study by Business Monitor International said.

Increase in Saudi oil production

Between 2008 and 2018, BMI said it was forecasting an increase in Saudi oil production of 18.2 percent, with volumes rising steadily to 12.8 million bpd by the end of the 10-year forecast period.

The BMI report added that Saudi Arabia's real gross domestic product growth was seen at 2.1 percent for 2009, following 4.2 percent growth in 2008, as reported by ArabianBusiness.com. BMI also said it was predicting 2.8 percent growth in 2010, 3.5 percent in 2011/12, followed by 4.2 percent in 2013.

"We expect oil demand to rise from an estimated 2.22 million bpd in 2008 to 2.49 million bpd in 2013, representing three percent annual growth," the report said.

Joining IRENA could open up a whole new world of investment opportunities in Saudi Arabia. Green investments are among the fastest growing in the world and the Middle East region is starting to come round to this fact and despite Saudi Arabia continuing to grow its oil production, new FDI could find its way into the kingdom as its starts its green revolution.

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