Abstract
Saudi Arabia is highly dependent on oil for domestic energy consumption. This dependency costs the country its oil export supply. Remaining under this energy policy puts the country at risk of becoming an energy importer by 2038. Therefore, it is vital to find solutions to conserve energy, sustain new energy sources, and preserve most of the country’s oil for strategic market control and exporting purposes. The author uses system dynamics (SD) modeling to simulate six scenarios from 2018 to 2030: the Saudi 2030 Vision’s energy initiatives and the proposed policy, with a low, medium, and high oil price scenario for each simulation. The proposed policy will use a fixed capital of $2 billion to invest in developing the solar manufacturing industry to mass produce solar power systems solely for residential consumers throughout the simulation period. All proposed policy scenarios showed positive results; they tremendously increased gross domestic product (GDP), managed to save oil by eliminating oil consumption, increased employment, and decreased carbon dioxide emissions. Additionally, results showed the sensitivity of oil price to the country’s GDP; this is because of the high dependency on oil.
AMRO A. BANJER, ATSUSHI AOYAMA. (2018) The Impact of Reforming Saudi Arabia’s Energy Policy by Developing the Solar Residential Industry: A System Dynamics Approach, International Review of Management and Business Research, Volume 7, Issue 1.
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