Saudi Arabia plans to spend $80 billion on expanding its power generation capacity

Jeddah: Saudi Arabia plans to spend $80 billion on expanding its power generation capacity and transmission network in the next decade to meet rising demand. Two-thirds of the funding will be by Saudi Electricity Co. One-third is expected to come from private investors.

Saudi Arabia planned to raise the use of stock for power generation to 2.5 million barrels of oil equivalent (BOE) on a daily average by 2020, from 1.5 million BOE last year. Saudi Electricity needs to boost capacity by 3,000 megawatts a year to meet annual demand growth of 8 percent, spurred by a $400 billion, five-year government-spending program and a rising population. The utility plans to invest SR205 billion ($54.7 billion) in capacity expansion by 2018.
The Kingdom will boost capacity by 20,000 megawatts in the next 10 years from 46,000 megawatts currently, Al-Awaji said.

Consumption peaks in the summer months of July and The Saudi Electricity Company published its 2009 annual report which said that it plans to add 12,000 megawatts of additional power generation capacity by 2015. Almost 2,500 MW of that will come online this year alone, bringing overall capacity to just over 40,000 MW.
The company plans to invest some $28 billion over the next three years to meet lagging supply. Slightly more than half of Saudi Arabia’s utility power is already generated by burning diesel, fuel oil, and petroleum. Natural gas accounts for most of the rest.

Meanwhile, gas production will continue to grow at a 6% annual rate until 2013, the same as the five-year period ending in 2008, and that includes recent finds, namely the Karan project, according to the JP Morgan report.

Saudi Aramco said the country is already the world’s fifth biggest gas producer with 8.3 billion cubic feet per day, behind Russia, the US, Iran, and Algeria. Another 5 bcf/d will be added by 2020. That is still far less than what would be required to meet the expected power demand surge.