Power has to rise to meet demand in Saudi Arabia

02 March 2010

Saudi Arabia will have to forge ahead with additional power projects if it is to remain in surplus

Saudi Arabia’s growing population and the kingdom’s ambitious industrial plans need a lot of electrical power – and quickly.

According to forecasts by Saudi Electricity Company (SEC), power demand in Saudi Arabia currently stands at about 42,000MW and will increase to 50,074MW by 2012, then to 75,155MW by 2020.

SEC has met demand by making spare operating capacity available. It has succeeded in this despite a 52 per cent increase in demand between 2000 and 2008.

While current plans for increased power generation capacity will allow the kingdom to continue to meet growing demand – assuming the project goes ahead on schedule – the government will still need to forge ahead with additional power projects in the coming years if it is to remain in surplus.

To this end SEC is moving ahead with expansion plans that will add 8,800MW of extra capacity to its grid by 2019 through the construction of five independent power projects (IPPs).

The state-owned utility has named France’s GDF Suez in consortium with the local Al-Jomaih Group as preferred bidder for the 2,000MW Riyadh PP11 project, while the prequalification process for the 1,000MW Ras al-Zour facility is also moving forward.

With these two projects, together with planned facilities at Qurayyah, Dheba and Shuqaiq and the 1,200MW Rabigh project, which reached financial close in July 2009, SEC intends to meet its target.

The Riyadh PP11 plant will be developed with half of the finance being provided by the private sector. The other plants will be developed using debt finance for 80 per cent of their costs.

Each project is expected to come online between 2012-2014. The plan is ambitious, but necessary, if Saudi Arabia is to continue to meet its growing electricity demands.

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