A new structure that will create a competitive market for electricity generation in Saudi Arabia should be in place in 2014, the MEED Saudi Mega Infrastructure Projects conference was told on 18 September.

At present, Saudi Electricity Company (SEC) generates, transfers and distributes electricity on a national basis. The restructuring will involve dividing SEC’s electricity generation business into similar companies that will compete with each other and SEC independent power projects (IPPs). SEC will also set up a single buyer of electricity from the four electricity generation companies and the IPPs. A single separate transmission company has already been established and has been in operation since January 2012.

“We are working now at establishing four generation companies and one distribution company by 2014,” said Amer al-Swaha, Head of SEC’s IPP programme. “The four generation companies will have similar capacity and technology, and will not be based on geographic region. They will all have the same starting point. This will allow us to compare their relative performance.

“All the four companies and the IPPs will be there,” Al-Swaha added. “And you will have a single-buyer model to buy all the power from those companies and pay [fees] to the transmission … and distribution companies. We are paving the way for more privatisation and liberalisation of the electricity market.”

SEC is more than 80 per cent owned by the government.