ELECTRICITY DEMAND FORECAST AND OTHER SOURCES OF ENERGY IN SAUDI ARABIA

Abstract

ABSTRACT Electric power has become a vital factor in modern living. Without it, life would have been much different. In spite of all the developments and the comforts mankind has derived from the use of electricity, today, the industry faces tremendous challenges. In some countries, it is the challenge of load growth. In others, it is the challenge of de-regulation and competition. The market forces companies to reduce costs while maintaining a reliable and quality power supply. In order to meet the rapid growth of population and the increasing demand by industrial sector, Saudi Arabia crossed the bridge to the new millennium by diversifying its economy through the development of non-oil based industries. Our focus in this study is to deal with the challenge of rapid load growth and to highlight other alternative sources of energy. The study also covers Saudi Arabia's 20-year forecasts for electricity demands. We will begin our study with a preview of the establishment of the Kingdom of Saudi Arabia and its unique geographical structure. Its population and climate differs from region to region. Economic development and the development of electric companies also differ, hence the necessity to provide comparative regional analysis about their respective generating capabilities, sales, and number of customers. Highlights in the form of literature information about energy in general. It underlines the importance of energy and the means to produce it. It is therefore essential for any decision maker to have not only historical data at hand for forecasting but also to understand alternatives for short and long term electricity generation. Examines the methodology to be used to forecast electricity demand. I conducted similar study for post-graduation project where I used simple model for analyzing demand of electricity in Saudi Arabia and generating long-term forecasts. This study, which was based on univariate analysis, generated reasonable forecasts, but not optimum as were anticipated. For this purpose, Multiple Regression model will be used to forecast the 20- year electricity demand requirement of Saudi Arabia. For computation purpose, Microsoft Excel, statistics and other statistical software were used for correlation and regression analysis, and generating forecasts along with the residuals. From these residuals, Mean Square Error, Mean Absolute Error and other yardsticks to measure accuracy of forecasts are computed and validity of models is determined. Finally presents data analysis of our forecast, and provides the conclusion and the recommendations of our electricity forecast in the Kingdom of Saudi Arabia.