BODOR NAJD CONTRACTING ‫مؤسسة بدور نجد للمقاوالت‬

Report reflect electrical power market in Saudi

Prepared by Engr. Loay Al Baba

P.O.Box 260494, Riyadh 11342, Saudi Arabia – C.R.1010117483-C.C.No.55833 -Tel. /fax :-00966114090443 -

Email :- info@megateway.net http:// www.megateway.net

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Market Overview

The installed power capacity in Saudi Arabia is expected to grow at a CAGR of approximately 1.50%
during the forecast period of 2020 – 2025. Energy demand in the country is growing by 8-10% per year
and peak demand is expected to be 70 GW by 2020 and 120 GW by 2032, driven partly by desalination
increase. To meet the electricity demand, the Kingdom is estimated to increase its power generation
capacity from 77 GW in 2014 to 156 GW by 2040. It includes installing 5 GW capacity and distribution
infrastructure every year through 2020. To achieve the aim, the government is planning to invest USD 5
billion in electricity generation and USD 4 billion in distribution. However, the geopolitical tensions in
the country and its fiscal deficit are expected to negatively impact the power market in the coming years.

 Under Saudi Vision 2030, the country plans to use clean energy sources to generate electricity to meet much of
its future energy needs to diversify its economy.

 Privatization of power sector is an important opportunity, and if the government capitalizes on this opening, it
will help with large investments that are needed for the reformation of the power sector and provide the country
with the expertise needed to generate the renewable energy at lower costs.

 GCC grid interconnections between the six Arab states of Kuwait, Saudi Arabia, Bahrain, Qatar, United Arab
Emirates (UAE), and Oman is expected to drive the market.

Scope of the Report

The Saudi Arabia power market report include:

Key Market Trends

RENEWABLE POWER GENERATION TO WITNESS RAPID GROWTH

 Oil & gas accounts for the major share in the country's electric power generation. In addition, the kingdom uses
large quantities of oil liquids, including crude, heavy fuel oil and diesel to generate electricity.

 Under Saudi Vision 2030, the country plans to use clean energy sources to generate electricity to meet much of
its future energy needs to diversify its economy. Moreover, the Saudi government envisages nuclear and
renewables to supplement the energy mix, thereby freeing up oil for other revenue generating opportunities.

P.O.Box 260494, Riyadh 11342, Saudi Arabia – C.R.1010117483-C.C.No.55833 -Tel. /fax :-00966114090443 - Email :- info@megateway.net

http:// www.megateway.net

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 BODOR NAJD CONTRACTING ‫مؤسسة بدور نجد للمقاوالت‬

 OPEC’s biggest oil producer, Saudi Arabia is aiming for renewable energy installations, primarily solar and
wind, of 9.5 GW by 2023 (accounting for 10% of total installed capacity). By 2030, the country is expected to
generate 70% of its electricity from natural gas and 30% from renewables and other sources, which include
nuclear power plants.

 Nuclear power is likely to play a significant role in meeting future power needs. While the National
Transformation Program (NTP) have set a target to incorporate nuclear energy into the national energy mix and
aims for a 30% local content contribution.

 Coal-fired generation has been promoted in some of the Gulf Cooperation Council (GCC) countries but not, so
far, in the Kingdom. Therefore, the energy diversification is expecetd to provide significant opportunity for the
power generation market.

GCC INTERCONNECTIONS TO DRIVE THE MARKET

 Recognizing the benefits of interconnecting their power grids, the six Arab states of Kuwait, Saudi Arabia,
Bahrain, Qatar, United Arab Emirates (UAE), and Oman, decided to build an AC interconnection of the 50 Hz
systems of Kuwait, Bahrain, Qatar, UAE and Oman, with a back-to-back HVDC interconnection to the 60 Hz
Saudi Arabian system.

P.O.Box 260494, Riyadh 11342, Saudi Arabia – C.R.1010117483-C.C.No.55833 -Tel. /fax :-00966114090443 - Email :- info@megateway.net

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 The interconnection was justified, based on reserve sharing between the systems; the cost of the project was
divided among the participating systems in proportion to their estimated reserve capacity savings.

 The principal benefits of the interconnection arose from the sharing of reserves between the systems, and the
consequential reduction in the installed generating capacity and associated operating and maintenance costs in
the GCC countries. This interconnection was planned and executed in the three phases.

 The aim of this project is to give Kuwait and Saudi Arabia a 1,200 MW of power capacity each (along with
UAE 900 MW, Qatar 750 MW, Bahrain 600 MW and Oman 400 MW). The project was overseen by the board
of directors of the GCC Interconnection Authority (GCCIA). GCC Grid has the potential to expand into North
Africa and eventually link with Europe's power grids. Hence, this project is expecetd to drive the Saudi Arabia
Power market during the forecast period.

Competitive Landscape

The Saudi Arabia power market is fragmented. Some of the major companies include Saudi Electricity
Company (SEC), ACWA Power, Power and Water Utility Company (MARAFIQ), and Engie SA.

Major Players

1. Saudi Electricity Company (SEC)

2. ACWA Power

P.O.Box 260494, Riyadh 11342, Saudi Arabia – C.R.1010117483-C.C.No.55833 -Tel. /fax :-00966114090443 - Email :- info@megateway.net

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3. Power and Water Utility Company (MARAFIQ)

4. Engie SA

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Engr. Loay Al Baba

GM Trading

P.O.Box 260494, Riyadh 11342, Saudi Arabia – C.R.1010117483-C.C.No.55833 -Tel. /fax :-00966114090443 - Email :- info@megateway.net

http:// www.megateway.net

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