Saudi Arabia is facing huge challenges with regards to its energy mix. From a purely economic standpoint, Saudi Arabia is winning market share at current energy prices, yet losing part of that share driving its highly subsidized domestic consumption. Saudi’s power generation sector consumes the equivalent of 7-10 % of the domestic oil production. Should this figure rise in the near future, which is highly likely, Saudi Arabia’s government will lose its geo-economic significance as the world’s major energy hotbed.
That, in itself, outweighs any other consideration for the Saudi establishment. For that, a new complex approach with regards to Saudi Arabia’s energy objectives needs to be documented and presented to decision makers.
This research project will develop a mid- to high-fidelity coupled model of water and electricity networks in KSA to examine the following three questions: (1) What is the growth potential, geospatial distribution, penetration rate and robustness of renewable sources of energy (solar, wind, incl. solar desalination plants) and nuclear energy in the future under realistic technological, financial and policy constraints? (2) For those isolated communities in KSA that have yet to be electrified, what is the best approach to provide reliable and sustainable electrical power? Specially, what is the tradeoff between long-distance overland transmission lines versus building local micro-grids with and without storage in these communities? (3) Finally, what are the challenges and opportunities for connecting the Saudi grid to neighboring countries such as the GCC and Egypt, while creating a more dynamic national and regional market in the future? The research methods and results developed in this country will also be applicable to other countries and regions such as the U.S., Europe, Africa and India, among others.
This project leverages the use of optimization models to capture the technical details and economic costs of the Saudi power system. These models are used to explore the prospects of renewables as part of long-term capacity/transmission expansion study. Moreover, the impact of renewables on fuel consumption and operational constraints is examined within a high-fidelity short-term optimization model. Finally, a game-theoretic approach is applied to the design of the Saudi electricity markets where a general electric equilibrium is imposed on the problem of optimizing the electricity market.