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Saudi Arabia will have to pump US$100 billion into the kingdom's power sector over the next 10 years to meet rising energy demands which are set to increase dramatically.
The combined spend on both power and water investment will reach US$160 billion in the next decade, Saleh Alawaji, deputy minister for electricity, stated reported Zawya.
"We need US$100 billion for the next 10 years for power projects," he said. "Two years ago, the figure was US$80 billion," Alawaji added.
The higher spending forecast is the result of government plans to build 500,000 new homes to meet the kingdoms' housing shortage which will see the country's annual peak power demand growth to 10 per cent in 2010 from seven per cent in 2008.
Alawaji stated that Saudi's current installed generation capacity was around 50,000 MW, but that an additional 4,000-5,000 MW needed to be added each year to meet the rise in demand.
While peak demand during the sweltering summer months is growing at a rate of around 10 per cent, total annual consumption is rising by around eight per cent.
A proposed "huge investment" to improve efficiency in power plants could result in an increase in electricity production of 20-30 per cent using the same amount of fuel, Alawaji said.
"It needs a huge investment and a modification for the existing facilities. It means a lot of efforts need to be put in that direction," Alawaji stated.
The government aims to reduce demand growth to five per cent a year within five years by introducing efficiency measures including new standards for air conditioning units, which typically account for nearly three quarters of the electricity used in homes.