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Tue 26 Apr 2011 05:26 PM

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Saudi Electricity may revise investment plans

SEC says power demand to grow 8-9% this year; to launch bidding for Qurayyah II soon

Saudi Electricity may revise investment plans
Demand for power in the kingdom is expected to grow 8 to 9 percent this year compared to around 10 percent a year earlier (Getty Images)

Saudi Electricity Co,

the Gulf's largest utility, may change its SR300bn ($80bn) 10-year investment plan as it speeds up delivery

of its power projects to meet state infrastructure demands, its

chief executive said.

State utility firm SEC has said it planned to invest the

funds in the 10 years to 2018 to boost capacity to at least

80,000 megawatts by 2020 from an installed capacity of 50,000

megawatts now.

"We revised in 2010 and we made many projects earlier than

planned," Ali Saleh Al Barrak said in an interview.

He said the company will stick to its investment programme

for the time being but could revise it in 2013. "We will look at

this amount, this amount could change based on the market

prices."

The Gulf Arab kingdom will continue its $400bn state

investment plan -- the world's biggest stimulus relative to GDP

- until 2013 as planned, its finance minister said in January.

"Plans have been accelerated. In fact we have to accelerate

some of our projects and make them come earlier than planned

because of the economic growth and the government's decision to

build more infrastructure projects."

The firm plans to launch bidding for the second phase of

expansion of its Qurayyah power plant soon, Barrak said, while

it is now in the process of selecting the preferred bidder for

the first phase of the 1,800-2,100 MW Qurayyah

IPP-1.

Demand for power in the kingdom is expected to grow 8 to 9

percent this year compared to around 10 percent a year earlier,

Barrak said.

Government officials have repeatedly said that demand for

power was forecast to triple to 120 gigawatts by 2030 in line

with an expected rise in domestic fuel consumption to 8.3

million barrels of oil equivalent per day (boepd) in 2028.

Barrak declined to comment on the rise of the fuel used to

fire their power plants. The country's deputy electricity

minister, Saleh al-Awaji told Reuters last month with the new

expansion in power capacity, Saudi Arabia would burn more crude

this year without giving figures.

SEC's generation capacity stands at around 48,000 megawatts

while demand is now 26,000 MW, he said.

During the summer, demand would rise to 46 gigawatts but the

company would still have a reserve margin of 2 GW, said Barrak.

Gulf countries have similar patterns of consumption, which

sees demand peak in the summer. They have taken measures to

connect their grids in an effort to stave off shortages.

"We don't expect any shortage in the summer in the

generation side."

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