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Frost & Sullivan analyses Saudi energy use

Outlines Kingdom’s initiatives towards sustainable energy

| | Oct 14, 2012 | 6:09 pm
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Outlines Kingdom’s initiatives towards sustainable energy

Frost & Sullivan conducted an analysis on the new techniques being adopted by the Kingdom of Saudi Arabia to address rising energy consumption and improving energy efficiency. Announcing this, the company has shared the overview of the current situation of energy management in the Kingdom, outlining the country’s initiatives towards sustainable energy that will shape the future landscape of the sector.

The study highlights the construction boom and rising investments in real estate in the Kingdom, which has resulted in the phenomenal growth for building technologies and reflects the country’s energy-efficiency potential and the emerging market opportunities for HVAC, lighting, IBMS, waste to energy, MEP systems and performance contracting, said Frost & Sullivan.

Following are the salient points of the analysis:

Since all the sectors poised for growth operate on electricity, Saudi Arabia’s energy consumption has inevitably surged rapidly over the past few years. Additionally, economic growth across sectors, such as petrochemicals and plastics, power, water and wastewater, infrastructure and metals and mining, have contributed to increased energy consumption.

In 2011, the energy consumption pattern in Saudi Arabia was dominated by its residential sector, with 54% of total energy consumption, followed by commercial sector with 29%, and industrial sector with 17%.

Saudi Arabia is projected to account for over 50% of the GCC’s district cooling operating capacity and 33% of overall revenue by 2016, at a compound annual growth rate (CAGR) of 21.7%.

Saudi Arabia is the highest waste generator in the GCC, which was recorded at approximately 22 million tonnes in 2011. Availability of cheap fossil fuel and low landfill rates have been hindering growth of waste-to-energy and recycling market in the country.

The rise in energy consumption must be addressed by developing new techniques for energy efficiency.

Frost & Sullivan recommends upgrading existing systems, including controls, sensors, building management systems, and performance contracting models, along with harnessing energy-efficient products and systems to help rationalise energy consumption in the country.

Some techniques that can support energy-efficiency measures are HVAC, lighting, integrated building management systems (IBMS), performance contracting and recycling. Phasing out inefficient lighting systems with energy-efficient compact fluorescent lamp (CFL) and light-emitting diode (LED) lights is further expected to reduce annual electricity consumption by 3.2 Twh and CO2 emissions by 2.4 Mt.

Saudi Arabia is spearheading the region’s emerging trend towards adoption of alternative and renewable sources of energy. With a strong renewable energy resource base and constant technological developments, the country has plans to improve energy efficiency by using existing systems and encouraging use of energy-efficient products.

In 2010, the Government of Saudi Arabia established the Saudi Energy Efficiency Board (SEEC), as energy efficiency was identified as a national priority. Amongst others, one objective of the SEEC was to propose a national energy-efficiency plan in order to rationalise energy usage in the country. Thus, Saudi Arabia’s first grid connected solar power plant was inaugurated in 2011.

KSA offers over $1.35 billion of energy-saving potential and out of this about $1 billion is an immediate addressable market potential for energy efficiency. Currently, Saudi Arabia accounts for $1.44 billion of untapped energy-saving market, which translates to about 37.1 bn kWh of energy saved.

A critical challenge to development of the Kingdom’s energy-efficiency market is lack of awareness amongst end users. To address this, Frost & Sullivan recommends that Saudi Arabia should implement mandatory regulations on energy management and incentives for energy-efficient investments, along with efficiency standards for new air conditioning appliances and replace inefficient models and regulation on maintenance.

Saudi Arabia needs to incentivise implementation of new technology to reduce energy consumption, provide more autonomy to energy-related organisations and create awareness about conservation of energy with respect to increasing energy prices.

As the ongoing industrial development in the Kingdom is expected to raise the energy demand further. A transparent building model, showcasing periodic reduction in operational costs for new constructions as well as existing buildings is recommended.

“If Saudi Arabia implements energy-efficiency programmes as proposed by the electricity adviser, demand for products, such as programmable thermostats, energy-efficient HVAC equipment, and other associated services and solutions is expected to increase,” said Frost & Sullivan Environmental and Building Technologies Industry Manager, Kumar Ramesh.


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