DAMMAM – The Saudi electricity sector needs to restructure itself in order to improve its efficiency and price transparency, according to energy experts who attended the forum titled Electricity Reforms in the World: Perspective for Saudi Arabia.
The forum, which ended Tuesday at the Asharqia Chambers in the Eastern Province, was attended by local and international experts who addressed the nation’s electricity needs and the future of the Saudi electricity sector.
The forum was sponsored by Arbah Capital and Saudi Gazette.
“The Kingdom’s electricity sector has remained inefficient despite the availability of government resources and the presence of infrastructure. The Saudi Electricity Company (SEC) needs to re-engineer its goal to promote efficiency,” said Fareed M. Al-Yagout, president of the National Power Company, a Saudi joint stock company, without specifying how efficiency should be promoted.
He said capital is not the issue because there are plenty of available funds to finance electricity development projects, which, should be focused on improving efficiency.
“We have to create a completely new environment; there are too many controls that have not achieved efficiency and accountability,” he said.
Dr. Fereidoon Perry Sioshansi, president of the energy consulting firm Menlo Energy Economics, said that the Kingdom should be looking for a better and more credible electricity scenario during the next 15 years.
He said the diversification away from the Saudi dependence on petroleum within the next ten years should be looked into. “The trend towards green energy is now globally required.”
“The real issue is the credibility of present and forthcoming projects. Privatization is certainly another option, and in this regard the long-term financing and interest rates of funding should be looked at to determine the viability of the projects, Sioshansi said.
Saad Al-Hassosah, CEO of Arbah Capital, said there is $260 billion liquidity in the Saudi market that could be used for many projects, including the electricity sector.
“This liquidity is held in the hands of the private sector; we have to present a viable investment portfolio in order to utilize these funds,” he said.
The Government control of electricity is an important issue, although SEC has already announced the privatization of the electricity sector.
The SEC board has approved the unbundling of the utility into four separate generation companies.
The Saudi government plans to increase the country’s capacity by 2023 to between 27,000 megawatts to 70,000 megawatts. – SG