The Arab world should move away from its dependence on oil for generating electricity and look towards gas as a primary source of energy and renewables as a future alternative as the global power mix continues to grow, Michael Suess, CEO of Siemens AG’s Energy Sector said.
“I believe this part of the world should stop burning oil for electricity and focus much stronger on gas and put some solar and wind around,” Suess said in an interview with Arabian Business. “Oil is easier to transport on the one hand, [but] with gas if you do it right you have efficiencies of 61 percent.”
Hydro power and wind energy will remain the major renewable contributors to the global power generation mix in the future, he said. Siemens predicts that energy from renewable sources will account for 28 percent of the global power mix in 2030. According to Siemens’ estimates, global power consumption will rise from 22,100 terawatt-hours (TWh) in 2011 to 37,100 TWh by 2030. Hydro power and wind energy will continue to contribute the largest share of energy from renewable sources.
“In the [Middle East] region there is so much potential to work on efficiency where you have a very quick benefit on the resources which you save, and by that saving, the additional volume you can sell to the oil hungry countries in the world,” Suess said. “A lot of the power plants in the Middle East were built 20 to 30 years ago when no one had an outlook on efficiency.”
If Saudi Arabia, which is burning between 15 and 20 percent of its oil production for electricity was hypothetically able to halve that, it would save 1m barrels, equivalent to US$100m, Suess said.
“For oil producing countries it’s a no brainer, to buy gas and sell oil they have a much better ratio,” Suess said.
Following the Japan tsunami disaster in March 2011, Siemens pulled out of the nuclear business, planning only to supply components such as steam turbines for nuclear power plants. The future of nuclear technology post Japan fallout and Germany’s decision to exit from nuclear power is gas and other types of unconventional oil and gas, Suess said, as nuclear power is capital intensive.
“I personally believe that one of the game changers is gas in the next 100-150 years,” Suess said. “It’s not just shale gas or other types of unconventional gas and oil. These are game changers in addition to even better exploration methodologies. In the next 100-200 years fossil fuels in a very efficient way will be a significant part of power generation. In the end each country will mix up its portfolio.”
Jordan, which has no natural resources, imports 96 percent of its energy, and is battling Israeli efforts to undermine its plans of attaining nuclear energy, is looking to shale gas to meet its future energy needs. The kingdom has the world’s fourth-largest reserves of oil shale, an organic-rich, fine-grained sedimentary rock from which liquid hydrocarbons (shale oil) can be produced. Shale oil is a substitute for conventional crude oil, and the oil can also be burned directly for power production similar to coal.
Oil shale represents a significant resource in Jordan – approximately 60 percent of Jordanian territory contains oil shale deposits, which amount to an estimated 40bn to 70bn tonnes of oil shale available in the kingdom, according to Andres Anijalg, project director of Estonia’s Enefit, which is operating in the kingdom.
If Jordan was to fully leverage its oil shale resources, it would be able to satisfy its domestic energy needs and be in a position to become a net exporter of energy to neighbouring countries, according to Estonia’s Enefit.
The Middle East accounts for about 10 percent of the annual revenue of the energy division of Siemens, with Saudi Arabia being the biggest market.