BMI View: Low oil prices will constrain the Saudi government's spending, hampering efforts to diversify the power sector away from heavy reliance on oil-fired power generation over our 10-year forecast period. Attempts to increase non-hydropower renewable capacity will be muted due to fiscal pressures and stringent local content requirements, while we believe the government will focus on the well-developed thermal power sector instead.
|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:
We are maintaining our forecasts for Saudi Arabia's oil-fired generation over our 10-year forecast period. We expect that oil-fired generation will grow by an annual average of 2.8% over our 10-year forecast period.
According to local news sources, the Saudi Electricity Company (SEC) will likely delay the 1,400MW expansion of its Jeddah South power plant. The deadlines for technical bid submissions have reportedly been extended twice as fuel allocations had not been secured yet.
In July 2016, Saudi Aramco signed four engineering contracts for the construction of the Fadhili gas processing plant with companies such as SEC and French firm, Engie. The plant will also be combined with a 1.5GW gas-fired power plant.
State-owned Russian nuclear energy company, Rosatom, has offered to construct 16 nuclear power plants in Saudi Arabia, after the governments of Russia and Saudi Arabia signed a cooperation agreement on nuclear projects. Rosatom has stated that it will be able to construct the 16 power plants over a period of 20 years and at a cost of USD100bn. The first reactor could reportedly be ready by 2022. Due to long construction times and high costs associated with nuclear power plants, we do not include this in our forecasts as of yet.
SEC will be conducting a competitive bidding process for its two planned 50MW solar power plants in the regions of Al-Jouf and Rafha. Tender documents will be sent to pre-qualified bidders by the end of October 2016, with bid submissions expected in early 2017.
We are maintaining our forecasts for non-hydropower renewable electricity generation in Saudi Arabia. We expect that non-hydropower renewable generation will increase to 2.23TWh in 2025, from an estimated level of 0.1TWh in 2016.
In mid-August 2016, the Egyptian parliament approved the project for connecting the electricity grid networks of Saudi Arabia and Egypt. The project will be funded by the Kuwaiti Fund for Arab Economic Development to the sum of USD99.5mn. The national grids will be connected via three stations, one in the Egyptian city of Badr and the two other will be located in the Saudi Arabian cities of Medina and Tabuk. The interconnection will increase trading capacity to an estimated 3GW.
SEC has set out USD34mn for the development of different electricity infrastructure projects such as converter stations and transmission infrastructure. One of the projects is a contract awarded to Indian Firm, Larsen & Toubro, for the construction of a 132kV double circuit transmission line. The line will run parallel with 132kV cabling in the areas of Rafah, Arar and Sakaka.
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).