RIYADH – Saudi Arabia aims to liberalize its power industry beginning with the privatization of the electricity sector by 2014, experts attending the MEED Saudi Mega Infrastructure Projects Summit said. The privatization move aims to create a competitive market for electricity generation in Saudi Arabia, where at present the Saudi Electricity Company (SEC), which is majority owned by the government, 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's independent power providers (IPPs). The 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 program said. “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,” he said. “And you will have a single buyer model to buy all the power from all those companies and pay a transmission fee to the transmission company and the distribution companies a distribution fees.” A liberalized power sector is expected to help ease increasing electricity demand in the Kingdom, which rose by 8.9 percent to 51,000MW in 2011. “Demand is rising strongly and we expect it will be significantly higher than 120,000 MW in 2030,” Al Swaha added. The massive future demand is also seen to attract new investments in the power sector in Saudi Arabia, further boosting the projects market in the Kingdom. At the summit, experts forecast over $300 billion worth of projects in various sectors will awarded in Saudi in the next three years. Of this announced projects, $29.6 billion will be awarded in the projects sector this year – including $20 billion worth of airport and aviation projects in the pipeline throughout the Kingdom as part of the Ninth Development Plan (NDP). “The investment in several ambitious projects will have a major impact on Saudi Arabia's economic and social fabric; and will make it a truly regional financial, leisure and industrial hub of growing international importance,” said Edmund O' Sullivan, chairman, MEED Events, organizers of the Saudi Mega Infrastructure Project Summit. – SG
