BMI View: The Saudi Arabian government's plan to diversify its power sector away from oil-fired generation will be restricted as continued low oil prices constrain fiscal spending. Thermal power generation will remain dominant over our 10-year forecast period, particularly through gas-fired projects. Fiscal pressures and stringent local content requirements will be an obstacle to the nascent renewable power sector and the government will struggle to meet its capacity targets .
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Generation, Total, TWh||292.700||311.090||327.090||340.140||351.580||364.110||376.390|
|Consumption, Net Consumption, TWh||266.6||283.3||299.8||312.7||323.7||336.6||347.9|
|Capacity, Net, MW||69,139.3||71,701.2||75,082.1||77,806.5||79,438.7||80,386.7||81,025.0|
Latest Trends And Developments:
To finance construction of the 2640 megawatt (MW) Shuqaiq power plant, the Saudi Electricity Company (SEC) has signed a USD900mn loan agreement with the Export-Import Bank of Korea (KEXIM) and several other international banks, including Santander Bank, Deutsche Bank and the Bank of Tokyo Mitsubishi UFJ. The total cost of the power plant is estimated at USD3.2bn.
Under the newly unveiled 'Saudi Arabia Vision 2030' plan, the government has announced that it now plans to increase gas-fired capacity to generate 70% of total electricity output in the country by 2030.
Under the same plan, the Saudi Arabian government has decided to alter its renewables targets. Targets have been reduced to 9.5GW of renewables capacity by 2023. This is after the decision was made to push back the target of 41GW of solar to 2040 (after it was originally planned for 2032). We forecast these decreased targets will remain due to the prolonged period of low oil prices forecast, which will drag down government revenue and constrain fiscal spending.
We also note that the plan makes no mention of nuclear power, which we will monitor as it could mean that future plans for nuclear will be scrapped.
The amount of gas required to reach the desired goals outlined in the Vision 2030 plan means we do not include this into our forecasts as of yet until we see progress in developing gas-fired capacity (as well as gas exploration) to the capacity required to achieve this target.
SEC has called for two tenders of 50 megawatts (MW) of solar capacity each. The two solar farms are planned to be in the regions of Al-Jouf and Rafha.
The tender for the Egypt-Saudi Arabia Interconnection Project will be open from mid-2016. The project will enable the trade of up to 3,000MW. The total project is estimated to cost USD1.6bn.
The Saudi Arabia Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The Saudi Arabia Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for Saudi Arabia to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks Saudi Arabia's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Saudi Arabia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).