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Saudi Arabian power surge

Projects underway and planned will boost its generation capacity

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Water & Electricity Company has four projects underway that will significantly boost desalination capacity.
Water & Electricity Company has four projects underway that will significantly boost desalination capacity.

Saudi Arabia’s need for power is clear. Its young and growing population requires millions of new homes, which will all have to be connected to the grid. Billions is also being invested in the hydrocarbon sector and new industrial cities, which is further accelerating the country’s need for power and desalinated water.

In response to the country’s obvious need for more, Saudi Electricity Company (SEC) has announced its intention to develop three new independent power plants (IPPs) on a build, own and operate (BOO) basis.

Rabigh, with an intended capacity of 1200 MW, will be located 140km north of Jeddah and is scheduled for completion by July 2012. A new 2000 MW plant located 100 km west of Riyadh is pegged for completion by May 2012. The third new plant in Qurayyah, Eastern Province is set for completion by April 2014.

The expected investment required for the three projects is around SR 21 billion (US $5.6 billion).

In March 2009, a KEPCO/ACWA consortium was announced as the First Ranked Bidder for the Rabigh IPP project. Ten companies have been announced as qualified bidders for the Riyadh IPP project. Bids on Qurayyah are still pending.

The winner of each tender will form a project company with SEC. The project company will sell its entire capacity and output to SEC under a power purchase agreement (PPA).

Marafiq is the organisation in charge of implementing independent water & power projects (IWPPs) for the two industrial cities of Jubail and Yanbu. The combined value of its two planned projects is an estimated US $7.4 billion.

In Jubail, a combined power generation and desalination plant is scheduled to start up in the middle of 2009, with commercial operation planned for March 2010. The plant will have a capacity of 2750 MW and 800,000 m3 of water per day.

A company called Jubail Water and Power Company will own, manage and run the dual-purpose IWPP and transfer the entire asset to Marafiq after a period of 20 years. Marafiq, Suez, the Public Investment Fund (PIF) and Saudi Electric Company (SEC) are the shareholders in the company.

In Yanbu, there are plans for a 700MW power plant and a desalination facility with capacity of 150,000 m3 per day. Marafiq has invited tenders for the project and commercial startup is pencilled in for 2013.

Water & Electricity Company (WEC), a joint venture of SEC and Saline Water Conversion Corp, has four IWPPs underway or nearing completion in Ras Azzour (Ras Az Zawr), Shuaibah and Shuqaiq.

At Shuaibah, two additions to the existing complex have seen the addition of around one million m3 per day of water generation capacity. The two projects combined are worth US $2.7 billion and were scheduled to begin commercial operations by the middle of 2009.

Shuqaiq-II, an extension of the existing Shuqaiq plant, will add 850 MW of power and 212,000 m3 per day of water to the grid in the south of the country. The project is worth around US $1.87 billion and is due to begin commercial operation in December 2010.

WEC’s fourth announced project is at Raz Azzour, in the country’s northeast. A consortium of Sumitomo Corporation, Aljomaih Automotive and Malakoff International has been named first ranked bidder for the project.

According to WEC, Raz Azzour will be the biggest single desalination plant in the world, with daily capacity of 1,000,000 m3. It will also generate 850-1100 MW of power. Commercial operation is due to start in August 2012.

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