EconPapers    
Economics at your fingertips  
 

Efficient industrial energy use: The first step in transitioning Saudi Arabia's energy mix

Walid Matar (), Frederic Murphy, Axel Pierru (), Bertrand Rioux and David Wogan

Energy Policy, 2017, vol. 105, issue C, 80-92

Abstract: In Saudi Arabia, industrial fuel prices are administered below international prices and firms make decisions based on low energy prices, increasing domestic energy demand. This analysis explores alternative policies designed to induce a transition to a more efficient energy system by immediately deregulating industrial fuel prices, gradually deregulating fuel prices, and introducing investment credits or feed-in tariffs. It uses a dynamic multi-sector, mixed-complementarity model. Continuing existing policies results in a power system still fueled completely by hydrocarbons. The alternative policies result in a transition to a more efficient energy system where nuclear and renewable technologies become cost-effective and produce 70% of the electricity in 2032. Introducing the alternative policies can reduce the consumption of oil and natural gas by up to 2 million barrels of oil equivalent per day in 2032, with cumulative savings between 6.3 and 9.6 billion barrels of oil equivalent. The energy system sees a net economic gain up to half a trillion 2014 USD from increased oil exports, even with investments in nuclear and renewables. The results are robust to alternative assumptions regarding the value of oil saved and the growth in end-use energy demand.

Keywords: Saudi Arabia; Subsidy; Energy consumption; MCP; Fuel prices; Electricity (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421517301040
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Efficient Industrial Energy Use: The First Step in Transitioning Saudi Arabia’s Energy Mix (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:105:y:2017:i:c:p:80-92

DOI: 10.1016/j.enpol.2017.02.029

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-07-02
Handle: RePEc:eee:enepol:v:105:y:2017:i:c:p:80-92