According to the Kuwait based Kuwait Financial Centre, among the GCC economies, Saudi Arabia is seen as the most aggressive with respect to investments in the power sector.
The report said that Saudi Arabia strives hard to keep pace with the increasing demand for electricity due to population growth and high level of urbanization.
IMF estimates Saudi population to increase from the current 28 million to reach 31 million by 2015 and 37 million by 2020. Urban population contributes around 83.6% of the total population in the Kingdom which is growing at 2.2% annually. High economic development has also accelerated energy consumption in the Kingdom. Power consumption in the Kingdom has grown at a compound annual growth rate of 6% over the last 5 years and consumption is forecast to grow at a similar pace over the next few years as well.
Saudi Arabia is one of the top ranked nations with respect to residential consumption of electricity. Almost half of its power consumption is used by its residents. With diversification of the economy however Markaz expects a shift toward the industrial sector.
Currently, 49% of the power generation is sourced through natural gas and the remaining through liquid fuels with renewables accounting for a negligible share. The situation would change as nuclear and solar power is increasingly seen as an option to satisfy the demand, the report noted.
Markaz further said that in 2000, Saudi Electricity Company became operational with all the electricity companies included in it. As of now, SEC is the leading power producer in the Kingdom with about 50 operating units across the country with a capacity of over 40,000 MW.
From the period of it’s the generation capacity has grown by 2.5 times. SEC is estimating 46% increase in sold energy by 2016 compared to 2010 figures. In 10 years of its inception total power transmission has increased by almost 50% to 60% and total transmission lines have increased by almost 75%. Number of customers under the SEC's operation has also increased by over 70% during this period.
Recent developments indicate that SEC is planning fresh investments of close to USD 100 billion in order to meet the forecasted demand. By 2020, the Saudi government is planning to create an additional 30,000 MW of generation capacity as part of its plan to ramp up power generation capacity by two folds by 2030. Moreover, many projects are implemented through private participation as well. This is a huge invitation to foreign players to invest in the Kingdom and be a partner, leveraging the opportunities of GCC power grid and Pan Arab power grid.
According to King Abdullah City for Atomic and Renewable Energy, after the successful completion of establishing and commissioning of nuclear power plants the Kingdom aims at generating 20% of its demand through nuclear by the end of 2030. The Kingdom is also aiming to have 41,000 MW of solar power capacity in the next 2 decades.
Saudi Arabia has a very strong track record in the development of power projects. The Saudi government has long demonstrated a substantial commitment to social and economic infrastructure. The country is executing an expansion plan for power projects under the Ninth Development Plan (2010-2014) aiming to raise generating capacityby 20.4 GW by 2014.
Source - The Saudi Gazette
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