Cost, Emission, and Macroeconomic Implications of Diesel Displacement in the Saudi Agricultural Sector: Options and Policy Insights

Amro Elshurafa, Hatem Al Atawi, Fakhri Hasanov and Frank Felder
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Frank Felder: King Abdullah Petroleum Studies and Research Center

Discussion Papers from King Abdullah Petroleum Studies and Research Center

Abstract: The Saudi agricultural sector relies on diesel for irrigation, which is provided to farmers at a much lower price than the average global price, implying significant opportunity costs. With the aid of soft-coupled power and macro-econometric models, we assess the cost and macroeconomic implications of electrifying irrigation activities in the Saudi agricultural sector. Three electrification scenarios are considered: electrifying each individual farm with a dedicated hybrid renewable micro-grid, electrifying the entire farm cluster with central generation and connecting the entire cluster via transmission to the national grid. Compared with the base-case, connecting the farm cluster to the national grid is found to be the most economical but the least environmentally friendly. The renewable and central generation scenarios are costlier (compared with the transmission scenario) due, respectively, to the high battery costs and gas infrastructure needed.

Keywords: Diesel Displacement; Agricultural (search for similar items in EconPapers)
Pages: 39
Date: 2022-08-24
New Economics Papers: this item is included in nep-agr and nep-ara
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Persistent link: https://EconPapers.repec.org/RePEc:prc:dpaper:ks--2022-dp03

DOI: 10.30573/KS--2022-DP03

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