Earlier this year, Saudi Electric Company CEO Zeyad Al-Shiba expressed his views on solar energy as an alternative to burning fossil fuels. While speaking at the 16th Quality Forum in Makkah he argued that solar energy is (still) too expensive to provide a realistic alternative.
His calculations: Solar Energy generation costs 7 times more than burning oil to generate the same amount of power. How can there be such a difference? He explains it himself: "Fuel is a subsided commodity for all citizens".
For solar, it's a different story. "The high costs involved (in producing solar energy) are linked to the manufacture of batteries that store energy and convert it to electricity, which is then channeled to the network. Such a manufacturing process is very costly and requires huge quantities of metals," he said.
The most shocking statement of all was his revealing of the actual amount of oil that gets burnt on a daily basis, in order to keep up with demand:
"SEC currently uses 2 million barrels a day to produce electricity."
Will this change? Not for the coming future, says Al-Shiba: "The company will not stop using oil to generate electricity."
Businesswise, this might seem like a good strategy for now. But is this sustainable? As Saudi Arabia eats away more and more of its oil supply for own use, less of it can be made available for vital foreign export. In order to keep its export business flourishing, energy utility business models will need to change. As well as subsidies...
This article was rewritten from the article "Solar energy is too costly for us: SEC CEO" by Utilities-ME.com