1. INVESTMENTS IN POWER SECTOR
FOR ECONOMIC GROWTH
Saudi Economic Forum
1-2 March 2011
Riyadh

2. Available generation (MW)
GROWTH (2000 – 2009)
DATA
No of customer ( Million)
Peak load (MW)
Available generation (MW)
Transmission (KM)
Energy (GWH)
2000
3.6
22000
23000
30000
114000
2010
5.7
45000
48000
49000
198000
Increase
2.1
25000
19000
84000
Growth (%)
58%
104%
108%
63%
73% 2

3. projects Under Execution
Generation 174 projects US$18 bln .
Transmission 290 projects US$14 bln.
Distribution 170 projects US$ 2.3bln.
Total projects US$ 34.3bln.
will be in operation

4. LOAD FORECAST MW

5. FUTURE CAPITAL INVESTMENT
Over the next 10 years:
Generation expansion US$45 billions
Transmission expansion US$ 22 billions
Distribution expansion US$ 13 billions
Total capital investment US$ 80 billions

9. IPP PROGRAM 30 – 40 % of Future generation will be IPP .
SEC will Continue to encourage private investors to build, operate and own power projects .
30 – 40 % of Future generation will be IPP .
SEC partnership will be 20%-50% in the equity.
Long term power purchase agreements (20years)
With reasonable return on investment .

10. IPP PLANNED PROJECTS US $ 15bn TO BUILD 12 GW NAME OF IPP PROJECT
CAPACITY (GW)
INVESTMENT
BlnUS$
PROJECT COMPLETION
QURAYYAH
1.8
2.3
2014
DHEBA
1.6
2.1
2015
SHUQAIQ
ALOGAIR
2.4
2.8
2016
JEDDAH SOUTH
2017
RAS ALZOUR
2.9
2019

11. Conclusion The growth of electricity demand will continue 7-8%.
Massive investments (80 billion US$).
30% of generation expansion as IPP .
Private sector have the opportunity .
Private sector have responsibility
Infrastructure
Technology and Saudi work force

13. Power Industry in Saudi Arabia
Starts in the 50`s as 100%private utilities .
Late 70`S consolidated into four major power companies (SCECO’s).
Mid 2000 All operating entities merged in one company :
Saudi Electricity Company (SEC).
The government involved as shareholder .

14. SAUDI ELECTRICITY COMPANY
Largest electric utility in the region in terms of capacity ,market capital and shareholder’s equity.
Serving the largest economy in middle east and 6million customers in cities ,towns and villages.
Owns 85% generation and 100% T&D and retail .
Total assets over 60 bn US$.
Annual revenues US$ 6bn with 6% annual growth.
50 GW installed capacity with 8% growth .
(AA- ) credit rating

15. Scope of Operations
SEC’s operations are split into four main regions, which reflects the historical regional structure of the power sector
Interconnection of the four regions is a high priority for SEC, which will mitigate the need for some new capacity and will harbour greater efficiencies
This will be covered in greater detail by our Transmission Division

16. CHALLENGES Electricity is the basic infrastructure .
Power is capital-intensive infrastructure projects.
High growth in demand ( will continue 7- 8%).
High consumption for residential use (55%).
Low average load factor (60%) seasonal.
Inefficient old of generating units.

17. 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.

18. SUCCESSFUL IPP ROJECTS
Two IPP Projects in process:
1. Rabigh Power Plant (Awarded July 2009)
1200 MW / HFO
IPCOD APRIL 2012
Investment 2.4 billion US$
IRR 8.5% with 20% for SEC
2. Riyadh Power Plant 11 (awarded last month)
1800 MW / GAS
IPCOD APRIL 2013
INVESTMENT 2.3 billion US$.
IRR 6.5% with50% for SEC

20. Opportunities Building more power generation capacity .
Replace all the old generation units.
Development of new power plants as an IPP.
Promote energy conservation initiatives.
Load management programs (time of use tariff).
Our medium term plan will see continued investment in our generation plants to ensure that we maintain our capacity margin of 10%
The two charts provide a breakdown of our planned annual capacity additions by region in terms of MW and costs
In addition, IWPP’s are planning to add additional capacity of 6,000MW over the next 6-7 years
Introduce smart grid and smart meters .
Encourage and support renewable energy.

21. Conclusion opportunities are greater
The growth of electricity demand will continue 7-8%.
Massive investments (80 billion US$).
30% of generation expansion as IPP .
Private sector have the opportunity in these expansions.
The challenges are great, but the
opportunities are greater

22. SAUDI NATIONAL GRID by 2020

23. Saudi power plans First long-term electricity plan developed 1979.
Between regional planning by SCECOS.
2003 SEC issued the first integrated power plan.
10- year forecast becomes more practical in KSA.
Near term 5-year plan window used today.
periodic update of the plan every tow years.
Low residential tariff (8 hallah /kwh) .
Low average load factor (55%) seasonal.
Inefficient old of generating units.