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Saudi electricity market set for massive change

Demand in Kingdom forecast to rise to 120GW in 2030

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Saudi's power sector privatisation will see four generating companies created. (GETTY IMAGES)
Saudi's power sector privatisation will see four generating companies created. (GETTY IMAGES)

Saudi Arabia is planning to privatise its electricity sector by 2014 in a move to liberalise its power industry, according to experts attending the Saudi Mega Infrastructure Projects Summit. The move will see Saudi Electricity Company’s (SEC) generation business divided into similar companies that will then compete with each other, and with SEC’s independent power providers.

SEC is also going to establish a single buyer to purchase electricity from the four generation companies, and the IPPs.

“We are working now at establishing four generation companies and one distribution company by 2014. The four generation companies will have similar capacity and technology and will not be based on geographic region. They will all have the same starting point. This will allow us to compare their relative performance,” Amer Al Swaha, head of SEC’s IPP programme said.

“All the four companies and the IPPs will be there. And you will have a single buyer model to buy all the power from all these companies and pay a transmission fee to the transmission company and the distribution companies a distribution fee,” he added.

The move is seen as a way to alleviate the electricity supply problems created by Saudi’s rising power demand – which increased by 8.9% in 2011 to 51,000 MW. Al Swaha said that demand was expected to reach 120,000 MW by 2030.

The Saudi Mega Infrastructure Projects Summit also heard that over $300 billion worth of new projects are expected to be awarded in the Kingdom within the next three years.
 

 

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