Weather poses challenge to Saudi power sector

Saudi Arabia is facing challenges in its drive to face the rapid increase in domestic demand for electricity because of the hot weather and high population growth, the Gulf Kingdom's largest bank said on on Monday.

The world's largest oil exporter is pumping a staggering SR330 billion into the power sector to expand its generation capacity by 22,000 MW to 65,000 by 2018, National Commercial Bank (NCB) said in a study sent to Emirates 24/7.

Its figures showed the government-controlled Saudi Electricity Company (SEC) has enhanced its generation capacity since 2000 by 73 per cent to 43,000 MW in 2009. The capacity enhancement drive continued by adding 2,615 MW during the first half of this year, bringing the total effective running capacity to 40,496 MW, including 607 MW available from the leased generating units, it said.

The power generation at SEC plants alone increased by 1.6 per cent to around 87.5 billion kwh in the first half of 2010 over the same period of last year and is expected to exceed 180 billion kwh for the whole of 2010.

"Saudi Arabia's power sector foremost challenges are enhancement of generating capacity and the expansion of distribution networks to meet rising power demand for its growing population and rising industrial capacity.

"Meanwhile, the power demand increased at a higher pace by 6.8 per cent in 2009 to 193.5 billion kwh, one of the world's highest rates at 7,520 kwh per capita, largely driven by hot climate and cheap power tariffs."

The study showed the number of electricity subscribers increased to 5.84 million at the end of the first half of this year.

To match rising demand, SEC has awarded SAR14.7 billion worth of new projects to meet rising demand, the study said,

"The SEC needs to enhance 22,000 MW of generating capacity to raise the country's total capacity to 65,000 MW by 2018."

According to the report, the electric power access will spread across 12,000 cities, towns, and villages in the Kingdom by 2018. To execute the plan, capital investment is estimated at SR330 billion including SR173.4 billion for power generation, SR 99 billion for transmission, and SR57.5 billion for distribution to nearly 7.6 million subscribers across the Kingdom.

Saudi Arabia's population has grown by 2-3 per cent annually over the past decade, reaching an estimated 27.1 million in April.
 

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