Saudi Arabia will need investment of SR500 billion ($133.3 billion) in electricity projects over the next 10 years to cope with rising power demand, its electricity and water minister said.

Minister Abdullah Al-Hussayen told an industry conference the country expects peak electricity to hit 90,000 megawatts (MW) in 2022. Installed capacity is around 70,000 MW now.

Saudi Electricity Company (SEC), the largest power producer in the kingdom, said in September peak electricity load hit its highest level ever in August driven by local demand for power during the summer. SEC's peak load rose by 10.2 per cent to 62,260 MW from 56,547 MW a year earlier.

"The expansion plan in the sector...requires the execution of electricity projects for the next 10 years whose costs will exceed SR500 billion ($133.3 billion) and in which the private sector is expected to take part," Al-Hussayen said.

Al-Hussayen said contracts to build an electricity grid to connect Saudi Arabia and Egypt would be signed before mid-2016, and the project would operate at full capacity before mid-2019.

The project aims to allow power trading between the two countries. Peak-time summer power consumption in Saudi Arabia is between noon and mid afternoon, when air-conditioners are used most intensively, while in Egypt the peak is after sunset.

Deputy oil minister Prince Abdulaziz bin Salman told the same conference Saudi energy consumption was expected to grow by four to five per cent annually in the next few years, reaching double its current level by 2030 if no efficiency measures are taken.

Domestic energy consumption was around 38 per cent of the total oil and gas resources produced in the kingdom, he said, repeating the kingdom would save 1.5 million barrels per day of oil equivalent (boepd) by 2030 with an efficiency programme he is supervising.

An extra 850,000 boepd would be saved with higher efficiency from power and water desalination plants as well as better use of feedstock for petrochemicals, which account for 19 per cent of the total energy consumption in the kingdom, he added. – Reuters