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Saudi Arabia Power Report Q4 2012
Business Monitor International, October 2012, Pages: 52
The Saudi Arabia Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Saudi Arabia's power industry.
Leading indicator data has not dampened BMI’s positive outlook on the Saudi Arabian economy, reaffirming our view that Saudi Arabia’s power sector will remain among the most dynamic in the Gulf Cooperation Council over the short-term. In addition, macroeconomic and demographic dynamics support a positive medium-to-long-term outlook. Announcements have prompted us to revise upward our capacity forecasts for the non-hydro renewable segment, namely solar. However, our outlook is more conservative than the one presented by the government, as we still believe that the existing regulatory environment creates downside risks for new projects.
With fixed investment and government spending continuing to grow apace, BMI’s country risk analysts hold to their above-consensus forecast for real GDP growth of 5.2% in 2012 and have revised up the projection for 2013 from 4.1% to 4.5%. Heavy government stimulus has prompted an acceleration of activity more-or-less across the board, and our outlook for both domestic consumption and fixed investment remains broadly positive. Available macroeconomic data continues to impress, and we expect the economy to remain a regional outperformer in the near term, pushing power consumption.
While the pace of growth achieved over the past couple of years (real GDP grew by an estimated 7.1% in 2011) will be difficult to sustain over the medium term, positive economic and demographic dynamics,
coupled with sector-specific developments, will also continue to support an healthy growth outlook for the country’s power sector in the coming years. This will push the government to expand and diversify its capacity generating infrastructure in the following ways:
- The country is already executing an extremely ambitious US$80bn expansion plan for power projects, with the Kingdom’s Ninth Development Plan (2010-2014) aiming to raise generating capacity by 20.4 gigawatts (GW) by 2014. Even if BMI adopts a conservative stance and only 70% of the planned capacity comes online, our forecasts show that the country will be able to meet its commitments, with total installed capacity to reach just over 72GW by 2014.
- Plans to include non-hydro renewable sources, namely solar, have started to take shape in the Kingdom, with the country announcing in May 2012 that it is seeking US$109bn of investment.
This is to be channelled into expanding its undeveloped solar industry – aiming to reach an ambitious target of 41GW of installed capacity by 2032.
While more bearish than the Saudi government, BMI believes that the very strong track record in the development of power projects bodes well for non-hydro rewables expansion, especially since the Saudi government has long demonstrated a substantial commitment to social and economic infrastructure, as well as its desire to free up hydrocarbon for exports through the development of alternative technologies such as nuclear and now solar.
BMI Industry View 5
SWOT Analysis 6
Saudi Arabia Power SWOT 6
Regional Industry Overview 7
MEA Power: Strong Fundamentals Support Sanguine Outlook 7
Table: Top 10 Infrastructure Projects Globally In 2011 9
Industry Forecast Scenario 12
Saudi Arabia Snapshot (Macro) 12
Table: Country Snapshot: Economic and Demographic Data, 2011-2021 12
Table: Country Snapshot: Power Sector 12
Saudi Arabia Forecast Scenario 13
Electricity Generation and Power Generating Capacity 13
Table: Saudi Arabia Total Electricity Generation Data And Forecasts, 2010-2016 13
Table: Saudi Arabia Total Electricity Generation Long Term Forecasts, 2015-2021 14
Table: Saudi Arabia Electricity Generating Capacity Data And Forecasts, 2010-2016 15
Table: Saudi Arabia Electricity Generating Capacity Long-Term Forecasts, 2015-2021 16
Table: New Capacity – Planned Or In The Pipeline, 2012-2021 (MW) 21
Electricity Consumption 26
Table: Saudi Arabia Total Electricity Consumption Data And Forecasts, 2010-2016 26
Table: Saudi Arabia Total Electricity Consumption Long-Term Forecasts, 2015-2021 26
Transmission & Distribution, Imports & Exports 28
Table: Saudi Arabia Electric Power Transmission And Distribution Losses Data And Forecasts, 2010-2016 28
Table: Saudi Arabia Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2015-2021 28
Key Policies/Market Structure 30
Regulation and Competition 30
Key Projects Database 31
Table: Key Projects 31
Risk/Reward Ratings 36
MEA Regional Power Risk/Reward Ratings 36
Table: Mea Power Risk/Reward Ratings (Scores Out Of 100) 40
Saudi Arabia’s Power Risk/Reward Ratings 41
Competitive Landscape 42
Saudi Electricity Company (SEC) 42
Glossary of Terms 44
Table: Glossary of Terms 44
Methodology And Sources 45
Industry Forecasts 45
Power Industry - Data Methodology 46
Generation and Consumption Data 46
Electricity Generation Capacity Data 47
Power Risk/Reward Ratings Methodology 47
Table: Power Risk/Reward Indicators 49