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BUSINESS OPPORUNITIES IN SAUDI POWER SECTOR
US-Saudi BUSINESS OPPORTUNITIES FORUM CHICAGO April 28-29, 2010
Ali Albarrak
President &C E O Saudi Electricity Company
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Electricity Industry in Saudi Arabia Starts as 100%private ownership and operation.
Late 70`S consolidated into four major power co (SCECO).
The government involved as major shareholder .
Mid 2000 All operating entities merged in one company
Saudi Electricity Company (SEC).
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Incorporated from 10 operating utilities in 2000.
Largest electric entity in the region in terms of capacity ,market capital and shareholder’s equity.
Owns 85% generation and 100% transmission , distribution and retail .
Total assets over 50 billion US$.
Annual revenues 6 Billion US$ .
Annual growth 6%.
74% directly owned by the Government.
SAUDI ELECTRICITY COMPANY
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Scope of Operations
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High growth in demand ( 7- 8%).
Operate in a very supportive environment .
High credit rating (AA~ ).
Invest in productive assets.
Reliable and secured fuel supply.
government support.
SEC credit strength
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DATANo of
customer ( Million)
Peak load (MW)
Available generation
(MW)
Transmission (KM)
Energy (GWH)
2000 3.6 22000 22000 30000 114000
2009 5.7 43000 45000 47000 191000
Increase
2.1 21000 23000 17000 77000
Growth (%)
58% 95% 104% 57% 67%
GROWTH (2000 – 2009)
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ACTIVITIES No of ProjectsCOST
)billion($
GENERATION 174 17.3
TRANSMISSION 291 9.3
DISTRIBUTION 176 2.1
TOTALS 641 28.7
projects Under Execution
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Load forecast (gwatts) Load forecast (gwatts) 68.4
65.362.6
59.957.4
54.952.5
50.1
46.944
4138.1
35.2
32.530.5
28.22724.423.7
10
16
22
28
34
40
46
52
58
64
70
Series1
1.56.0%
2.67.8%
2.86.0%
2.74.5%
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4.734.96
5.25.42 5.7
5.96.2 6.4
6.77.2
7.6
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
No OF CUSTOMERS (millions)(millions)
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Generation Capacity generation capacity installed should meet the expected
7% increase in peak demand and a reserve margin.
90
74
59
41
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2006e 2007e 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e
SEC Installed & new capacity IWPP Installed capacity IPP Installed capacity SWCC Installed capacity Peak Load total capacity
Generation capacity (GW)
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POWER SECTOR CHALLENGES
High annual growth in demand ( will continue 6-7%).
Extremely sharp daily and yearly load curve (air-
conditioning).
Replacement of inefficient old generating units.
High capital investment for expansion.
The need for private sector investment .
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HOW TO MEET THE CHALLENGES ?
More investment in power generation,T&D .
Encourage the developers for more IPP.
Introduce the smart grid transmission system.
Promote energy conservation and load management.
Invest in renewable energy.
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Year Project name Capacity (MW) Date in Service
Rabigh Steam Expansion 2,400 2014
PP-10 (Steam) 990 2014
Duba PP (IPP) 500 2014
Al-Shogaig PP 1,200 2014
Al-Jubail / Ras Al Zour 630 2015
Jeddah South 1,200 2015
Al-Shogaig PP 1,200 2015Al-Jubail / Ras Al Zour 1260 2016Al-Shogaig PP 800 2016Duba PP 250 2016Jeddah South 600 2016
Major Future Generation projects
2010
2011
2012
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Year Project Capacity (MW) Date in Service
Al-Jubail / Ras Al Zour 630 2017Al-Ogair / Salwa PP 630 2017Jeddah South 600 2016Al-Ogair / Salwa PP 1260 2017Jeddah South 600 2018Al-Ogair / Salwa PP 630 2018Al-Shogaig PP 400 2017Al-Ogair / Salwa PP 1,260 2019Al-Shogaig PP 400 2018
2016 Al-Jubail / Ras Al Zour 1,260 2020
total capacity: 25000 MW capital Cost : 50 Bln US$
Major Future Generation projects
2013
2014
2015
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IPP PROGRAM IN SEC
SEC will Continue to encourage private investors
to invest in Future Generation projects .
30 – 40 % of Future generation will be IPP(BOO).
SEC partnership will be 10%-50% in the equity.
Long term power purchase agreements (20years)
With reasonable return on investment .
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WHY IPP?
Providing Financial Option for Highly Capital
Intensive Generation Projects .
Helping To Re-Direct Available Funds To T&D
(Monopoly Activities)
Reallocation Expenditure From CAPEX To
OPEX.
Avoiding Mismatch Between Medium Term
Financing and Long Life PP Projects.
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SUCCESSFUL IPP ROJECTS
Two IPP Projects in process:
1. Rabigh Power Plant (closed financialyJuly last yea)• 1200 MW / HFO
• IPCOD APRIL 2012
• Investment US$ 2.4 billions
2. Riyadh Power Plant 11 (financial close next month)• 1800 MW / GAS
• IPCOD APRIL 2013
• INVESTMENT US 1.5 billions.
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18
IPP FUTURE OPPORTUNITIES
NAME OF IPP PROJECT
CAPACITY (GW)
PRIVATE SECTOR
SHARE %
PROJECT COMPLETION
QURAYYAH 2 80 2014
DHEBA 1.6 80 2015
SHUQAIQ 1.6 80 2015
ALOGAIR 2.4 80 2016
JEDDAH SOUTH
2.4 80 2017
RAS ALZOUR 2.4 80 2019
) INVESTMENTS OF $20B (TO BUILD 12 GW
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SAUDI NATIONAL GRID by 2018SAUDI NATIONAL GRID by 2018
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Year Project Length KM Date in Service
HAIL-ALJOUF-380KV 300 2014
ASIR_NAJRAN 380KV 400 2014
GAISOUMAH -ALFADLI 380 KV 250 2014
BISHA_DAWASIR 380KV 500 2015
5th 380 KV LINE TO CENTRAK 400 2015
MADINAH-HAIL 360 2015RIYADH-JEDDAH DC line 800 2016TABUK-TABARGAL 600 2016WEAST _SAUTH 2ND LINE 500 2016
Future 380KV transmission lines projects
2010
2011
2012
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Year Project Circuit Length KM
Tabuk-Tabarjal 300Umluj-Wadjh 250South-West 2nd line 500Jouf-Tabarjal 150
2015 Al-grayat- Tabarjal 2002016 Madinah-Tabuk DCLine 800
total capital cost 24 billion $.
Future 380KV transmission lines projects
2013
2014
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BUSINESS OPPORTUNITIES
Material and Equipment supply.As an EPC contractor .Local manufacturing .Participate in IPP projects .Opportunity in consultation and
engineering.Invest in future energy retail.
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The growth of electrical energy demand in Saudi Arabia will continue 6-7%.
Power projects needs 80-90 billion US$ as capital investments for the next 10 years .
Private investors have the opportunity to take 30-40% of the generation projects as a BOO projects.
US companies have the opportunity to take part both in EPC and IPP.
There are oportunities in Consultation , Engineering and Services in power sector.
Conclusion
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