business opportunities in saudi power sector
DESCRIPTION
Ali Saleh Al-Barrak, President and CEO, Saudi Electricity Company's presentation at the 2010 U.S.-Saudi Business Opportunities Forum in Chicago, IL.TRANSCRIPT
BUSINESS OPPORUNITIES
IN SAUDI POWER SECTOR
US-Saudi BUSINESS
OPPORTUNITIES FORUM CHICAGO April 28-
29, 2010
Ali Albarrak
President &C E O Saudi Electricity Company
Electricity Industry in Saudi Arabia Starts as 100%private ownership and operation.
Late 70`S consolidated into four major power co
(SCECO).
The government involved as major shareholder .
Mid 2000 All operating entities merged in one company
Saudi Electricity Company (SEC).
Incorporated from 10 operating utilities in 2000. Largest electric entity in the region in terms of
capacity ,market capital and shareholder’s equity. Owns 85% generation and 100% transmission ,
distribution and retail . Total assets over 50 billion US$. Annual revenues 6 Billion US$ . Annual growth 6%. 74% directly owned by the Government.
SAUDI ELECTRICITY COMPANY
Scope of Operations
High growth in demand ( 7- 8%).
Operate in a very supportive environment .
High credit rating (AA~ ).
Invest in productive assets.
Reliable and secured fuel supply.
government support.
SEC credit strength
DATANo of
customer ( Million)
Peak load (MW)
Available generation
(MW)
Transmission
(KM)
Energy (GWH)
2000 3.6 22000 22000 30000 114000
2009 5.7 43000 45000 47000 191000
Increase 2.1 21000 23000 17000 77000
Growth (%)
58% 95% 104% 57% 67%
GROWTH (2000 – 2009)
ACTIVITIES No of Projects COST )billion($
GENERATION 174 17.3
TRANSMISSION 291 9.3
DISTRIBUTION 176 2.1
TOTALS 641 28.7
projects Under Execution
Load forecast (gwatts) Load forecast (gwatts) 68.4
65.362.6
59.957.4
54.952.5
50.1
46.944
4138.1
35.2
32.530.5
28.22724.423.7
10
16
22
28
34
40
46
52
58
64
70
Series1
1.56.0%
2.67.8%
2.86.0%
2.74.5%
4.734.96
5.25.42 5.7
5.96.2 6.4
6.77.2
7.6
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
No OF CUSTOMERS (millions)
Generation Capacity generation capacity installed should meet the expected
7% increase in peak demand and a reserve margin.
90
74
59
41
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2006e 2007e 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e
SEC Installed & new capacity IWPP Installed capacity IPP Installed capacity SWCC Installed capacity Peak Load total capacity
Generation capacity (GW)
POWER SECTOR CHALLENGES
High annual growth in demand ( will continue 6-7%).
Extremely sharp daily and yearly load curve (air-
conditioning).
Replacement of inefficient old generating units.
High capital investment for expansion.
The need for private sector investment .
HOW TO MEET THE CHALLENGES ?
More investment in power generation,T&D .
Encourage the developers for more IPP.
Introduce the smart grid transmission system.
Promote energy conservation and load management.
Invest in renewable energy.
Year Project name Capacity (MW) Date in Service
Rabigh Steam Expansion 2,400 2014
PP-10 (Steam) 990 2014
Duba PP (IPP) 500 2014
Al-Shogaig PP 1,200 2014
Al-Jubail / Ras Al Zour 630 2015
Jeddah South 1,200 2015
Al-Shogaig PP 1,200 2015Al-Jubail / Ras Al Zour 1260 2016Al-Shogaig PP 800 2016Duba PP 250 2016Jeddah South 600 2016
Major Future Generation projects
2010
2011
2012
Year Project Capacity (MW) Date in Service
Al-Jubail / Ras Al Zour 630 2017Al-Ogair / Salwa PP 630 2017Jeddah South 600 2016Al-Ogair / Salwa PP 1260 2017Jeddah South 600 2018Al-Ogair / Salwa PP 630 2018Al-Shogaig PP 400 2017Al-Ogair / Salwa PP 1,260 2019Al-Shogaig PP 400 2018
2016 Al-Jubail / Ras Al Zour 1,260 2020
total capacity: 25000 MW capital Cost : 50 Bln US$
Major Future Generation projects
2013
2014
2015
IPP PROGRAM IN SEC
SEC will Continue to encourage private investors
to invest in Future Generation projects .
30 – 40 % of Future generation will be IPP(BOO).
SEC partnership will be 10%-50% in the equity.
Long term power purchase agreements (20years)
With reasonable return on investment .
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.
SUCCESSFUL IPP ROJECTS
Two IPP Projects in process:
1. Rabigh Power Plant (closed financialyJuly last yea)• 1200 MW / HFO• IPCOD APRIL 2012 • Investment US$ 2.4 billions
2. Riyadh Power Plant 11 (financial close next month)• 1800 MW / GAS• IPCOD APRIL 2013 • INVESTMENT US 1.5 billions.
18
IPP FUTURE OPPORTUNITIES
NAME OF IPP PROJECT
CAPACITY (GW)
PRIVATE SECTOR
SHARE %
PROJECT COMPLETION
QURAYYAH 2 80 2014
DHEBA 1.6 80 2015
SHUQAIQ 1.6 80 2015
ALOGAIR 2.4 80 2016
JEDDAH SOUTH
2.4 80 2017
RAS ALZOUR 2.4 80 2019
) INVESTMENTS OF $20B (TO BUILD 12 GW
SAUDI NATIONAL GRID by 2018SAUDI NATIONAL GRID by 2018
Year Project Length KM Date in Service
HAIL-ALJOUF-380KV 300 2014
ASIR_NAJRAN 380KV 400 2014
GAISOUMAH -ALFADLI 380 KV 250 2014
BISHA_DAWASIR 380KV 500 2015
5th 380 KV LINE TO CENTRAK 400 2015
MADINAH-HAIL 360 2015RIYADH-JEDDAH DC line 800 2016TABUK-TABARGAL 600 2016WEAST _SAUTH 2ND LINE 500 2016
Future 380KV transmission lines projects
2010
2011
2012
Year Project Circuit Length KM
Tabuk-Tabarjal 300Umluj-Wadjh 250South-West 2nd line 500Jouf-Tabarjal 150
2015 Al-grayat- Tabarjal 2002016 Madinah-Tabuk DCLine 800
total capital cost 24 billion $.
Future 380KV transmission lines projects
2013
2014
BUSINESS OPPORTUNITIES
Material and Equipment supply.
As an EPC contractor .
Local manufacturing .
Participate in IPP projects .
Opportunity in consultation and engineering.
Invest in future energy retail.
The growth of electrical energy demand in Saudi Arabia will continue 6-7%.
Power projects needs 80-90 billion US$ as capital investments for the next 10 years .
Private investors have the opportunity to take 30-40% of the generation projects as a BOO projects.
US companies have the opportunity to take part both in EPC and IPP.
There are oportunities in Consultation , Engineering and Services in power sector.
Conclusion