Efficient Industrial Energy Use: The First Step in Transitioning Saudi Arabia’s Energy Mix

Executive Summary:External observers worry about whether Saudi domestic consumption of oil will crowd out exports. This is based on simple extrapolations which suggest that in a little more than 20 years Saudi Arabia may become a net importer of hydrocarbon fuels. However, our research does not support this. Based on the “baseline scenario” macroeconomic assumptions in Oxford Economics’ global economic and industry models, we project Saudi Arabia’s energy balances until 2032 using the KAPSARC Energy Model (KEM). We analyze several cases: continuation of current pricing policies; immediate deregulation of fuel prices; phased deregulation of fuel prices; and a combination of incentives and small price increases that capture many of the benefits of deregulation. Our projections suggest that implementing these alternative fuel-pricing and technology investment policies would likely encourage the adoption of more efficient power generation and water desalination technologies. The alternative policies alter the transfer prices of fuels between sectors, but maintain the prices at which energy is sold to households. Future analyses will examine the next logical step of adjusting household energy prices in transitioning Saudi Arabia’s energy economy to match the efficiency of developed nations. For the Saudi energy economy, we find these alternative policies achieve a total economic gain that ranges between $430 billion and $505 billion (in real USD 2014), compared with continuing the current policies. Policies that manage transition can therefore be implemented without materially reducing the economic benefits.Our results could be used as a benchmark for an efficient energy transition in the Kingdom. They apply whether decisions to invest in new capacity follow a reform of transfer prices of fuels, or simply result from collective stakeholders’ decisions

摘要：外部观察者对沙特国内石油消费是否会挤占出口表示担忧。此观点基于简单的外推，预示沙特阿拉伯可能在20年多一点的时间内成为碳氢燃料的净进口国。然而，我们的研究并不支持这一观点。基于牛津经济研究所全球宏观经济和行业模型中的“基线情景”宏观经济假设，我们运用KAPSARC能源模型（KEM）预测了沙特阿拉伯至2032年的能源平衡。我们分析了多种情形：维持现行定价政策；立即解除燃料价格管制；逐步解除燃料价格管制；以及结合激励措施和小幅提价，以捕捉多数解除管制的利益。我们的预测表明，实施这些替代燃料定价和技术投资政策，可能会鼓励更高效电力生成和海水淡化技术的采用。这些替代政策调整了各行业间的燃料转移价格，但保持了向家庭销售能源的价格。未来的分析将探讨调整家庭能源价格的下一步逻辑步骤，以适应沙特能源经济向发达国家效率的转型。对于沙特能源经济而言，我们发现这些替代政策实现了介于4300亿至5050亿美元（按2014年实际美元计算）之间的总体经济效益，相较于继续现行政策。能够管理转型过程的政策因此可以在不显著降低经济效益的情况下得到实施。我们的研究结果可作为沙特王国高效能源转型的一个基准。无论投资新产能的决策是遵循燃料转移价格改革，还是仅仅由相关利益相关者的集体决策结果，这些结果均适用。