If the current practice of generating electricity by inefficient oil-based power plants continue, the Middle East will soon run short of crude oil, according to a new study.
The biggest challenge facing the energy sector of the Middle Eastern countries is to meet the region's surging demand for electricity, the study by Siemens and the Technical University of Munich has found.
Siemens has highlighted future challenges for the region citing the example of Saudi Arabia, the region's biggest crude oil producer.
"The rapidly increasing domestic demand for energy is a major challenge to the countries of the Middle East. More efficient power plants and greater utilisation of local natural gas deposits to fuel high-efficiency gas power plants can help to quench the thirst for energy sustainably and at an affordable cost," said Michael Suess, member of the managing board of Siemens AG and CEO of the Siemens Energy Sector.
Saudi Arabia's power demand is set to more than double by 2030. About half of its power is today being generated in oil-fired power plants, the rest in gas power plants. If this power mix were to remain unchanged, the country would have to import crude within just three decades as it would no longer be able to produce enough oil for its own consumption, the study warns.
To tackle the problem, Saudi Arabia is pushing to exploit renewable energy sources on a larger scale and to develop a nuclear power capability along with building more gas power plants.
Moreover, with the current power mix, there will be an increase of nearly two thirds in Carbon-dioxide emissions by 2030 would also entail. If significantly more natural gas is devoted to generate power, Carbon-dioxide emissions could be kept at the current level of just over 200 million tons per year, the study says.
Relying on a higher share of renewable and more nuclear power plants to similarly limit carbon-dioxide emissions would be around USD 60 billion more expensive, the study predicts.
Saudi Arabia's natural gas deposits would be enough to generate around two thirds of the country's power requirement for more than 100 years. At the same time, more than 40 million tons of crude oil per year could be saved, the study says.