saudi arabia-power sector growth opportunities

THE SAUDI ARABIA POWER TRANSMISSION & DISTRIBUTION

SECTOR

OPPORTUNITIES & CHANGES

Presented by:ABHAY BHARGAVAINDUSTRY MANAGERENERGY & POWER SYSTEMSFROST & SULLIVAN INTERNATIONAL INC.

2

AGENDA

1

2

3

4

5

6

3

SAUDI ARABIA – RAPID ECONOMIC GROWTH ENVISAGED

Downstream

Petrochemicals &

Plastics

Power

Sector

Water &

Wastewater

General

Infrastructure

Metals &

Mining

Source: Frost & Sullivan research/

IMF/ World Bank data

SAUDI ARABIA

Inflation % 6%

Population (Millions) 26+

Unemployment % 10-11 %

Ease of doing business 1 (11)

Percentage of GCC GDP 43%

Percentage of ME GDP 27%

Percentage of GCC Power

T&D investments 70%

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SAUDI ARABIA – POWER GENERATION GROWTH PLAN

$100 Billion* spend between 2011-2020 on Power Generation

$100 Billion* spend between 2011-2020 on Power Generation

Private sector contribution expected to grow from 7.4% to 17%+

Private sector contribution expected to grow from 7.4% to 17%+


SEC/ KACARE published data

Significant growth in Power GenerationGW

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SAUDI ARABIA – POWER GENERATION: INVESTMENT IMPACT

T&D lines: $ 8 – 10 Billion

Switchgear: $ 5.5 - 6 BillionTransformers:

$ 7.5 - 8 Billion


SEC published dataForecasted cumulative investments till 2016

4500 – 5000 Km of 380kV lines to be

laid by 2016

Number of customers expected to increase by 26%/

1.7 Mn

Cumulative spend on T&D � ~$30

Billion (2011 -2016)

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SAUDI ARABIA – PRESENT T&D INFRASTRUCTURE

Source: SEC

Interconnection of regions the next priority in T&D infrastructure development

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SAUDI ARABIA – TRANSFORMER LANDSCAPE

2010 KSA Transformer market ~ $ 1 Billion �Only ~70 Million manufactured locally

Local manufacturing focused primarily on distribution transformers

Requirement - Technical capabilities & skilled manpower for local manufacturing

Opportunities:

• To develop local skill and expertise � Tackle unemployment issues & contribute to Saudization

• Develop local vendors for supply of components to transformer manufacturers

Source: Frost & Sullivan research

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SAUDI ARABIA – SWITCHGEAR LANDSCAPE


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SAUDI ARABIA – SUB-STATION EPC LANDSCAPE


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SAUDI ARABIA – OVERHEAD TRANSMISSION LINES EPC LANDSCAPE


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GLOBAL TRENDS SHAPING THE POWER DISTRIBUTION MARKETS

20001990

Evolution of Technology

2010 2020

Systems

Integration

Building

Management

& Control

Building

Automation

Green

Buildings

IT

Convergence

Home

Automation

Energy

Control

Operational

Efficiency

Integrated

Networking

Energy

Management

Enhanced

Management

Intelligent

Buildings

Intelligent

Green

Buildings

Smart

Towns

Low

Energy

Lighting

Micro-

Renewables

Micro-

Generation

Smart

Grids

20001990 2010 2020

Emergence of Smart &

Intelligent Technology

Advanced

Metering

Infrastructure

(AMI)

Smart

Metering

Smart

Cities/Towns

Building

Automation

Virtual

power

plants

Energy

Management

Automated

Meter Reading

(AMR)

Source: Frost & Sullivan

Home Area

Network

(HAN)

IT

Convergence

Boom in

Renewables

Building Control

Building Automation

Smart Buildings

Building Performance

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FUTURE SMART ENERGY OPPORTUNITY- GLOBALLY

Future OpportunitiesAutonomous

distribution network –Micro Grids

Alliances between Utilities, Communication providers,

OEM‘s & distribution

companies

Home Area Network

Smart EnergySmart Energy

New technologies such as superconducing cables, and

high voltage DC (HVDC)

Market moving towards total

solutions

Automation

companies increasingly exploiting

arising opportunities Advances in storage

technologies

Smart Meters


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GLOBAL SMART TECHNOLOGY MATURITY CURVE

MaturityDevelopment Growth

Source: Frost & Sullivan

Smart Energy Technology Market: Regional Life Cycle Analysis (World), 2010

Western Europe

North America

Central & Eastern Europe

Middle East

Africa

Asia

Latin America

Tim

e S

cale

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SMART ENERGY – UPCOMING TRENDS & OPPORTUNITIES FOR SAUDI

ARABIA

15<GPS>15

POWER T&D SECTOR IN SAUDI ARABIA - MARKET DRIVERS

Grid

InterconnectivityInfrastructure

replacementTechnology

advancements

Industrialization

in Saudi ArabiaPower

Capacity

Augmentation

Energy

efficiency

16<GPS>16

POWER T&D SECTOR IN SAUDI ARABIA - THE MARKET CHALLENGES

Insufficient

focus on

Energy

efficiency

Constant

investments to

meet Peaking

demand

Lack of

coordination

between

stakeholders

Technology

adoption

(Lack of)

supporting

Mandates/

Regulations

Financing

(especially for

higher cost

Energy efficient

equipment

Lack of

qualified

manpower

17<GPS>17

SUMMARIZING OPPORTUNITIES

Local manufacturing of Transformers

& Switchgear

Design, Installation. Commissioning,

and Maintenance services

Smart grid related services like DRM

Network components (Substation

equipment, Cables, Conductors,

Distribution Components)

Smart meters

Automation Solution Providers &

Network management services

18<GPS>18

RECOMMENDATIONS FOR A SUPPORTING INFRASTRUCTURE

Promote National Enterprises

Promote National Enterprises

•There is need to develop localized Saudi manufacturing enterprises which would be able to address most of the equipment requirementfor the power sector in the country

•There is need to develop localized Saudi manufacturing enterprises which would be able to address most of the equipment requirementfor the power sector in the country

Develop the Capabilities

Develop the Capabilities

•Further develop capabilities of local enterprises through focus on training

•Provide an environment that encourages JV’s – especially those focused on technology transfer and development of local talent

•Further develop capabilities of local enterprises through focus on training

•Provide an environment that encourages JV’s – especially those focused on technology transfer and development of local talent

Develop national human talent

Develop national human talent

•Certified Technical education courses are a must to create a national pool of human talent

•Focus should be on developing courses that are recognized by theIndustry, to ensure relevance of training with specific industryrequirements

•Certified Technical education courses are a must to create a national pool of human talent

•Focus should be on developing courses that are recognized by theIndustry, to ensure relevance of training with specific industryrequirements

Attract Investment for Industrial

Equipment Services

Attract Investment for Industrial

Equipment Services

•Saudi Arabia should look at attracting more service providers to set up facilities in the country, in view of the large investments in the sector

•Saudi Arabia should look at attracting more service providers to set up facilities in the country, in view of the large investments in the sector

THANK YOU

saudi arabia-power sector growth opportunities

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