Saudi Arabia’s power sector needs to develop projects worth over SAR 250 billion over the next five years, the official Saudi Press Agency (SPA) said on Tuesday, citing energy minister Khalid Al-Falih.
The Kingdom’s peak load will reach 80,000 megawatts (MW) in 2022, Al-Falih added.
The new investments are likely to be financed and implemented by the private sector.
As part of efforts to diversify its energy mix, Saudi Arabia has launched the National Renewable Energy Program, which is targeting 3,450 MW of power generating capacity from renewable sources by the end of 2020, and 9,500 MW by 2023.
The Kingdom’s power industry is expected to witness some reforms, including a complete restructuring of the sector so as to set up a competitive electricity market, Al-Falih said.
The Saudi government will also ensure independence of the newly-formed Saudi Company for Energy Purchase Ltd. and will develop direct agreements to supply power generators with fuel.
In addition, fuel and electricity tariffs will be gradually deregulated.
Al-Falih added that a new account will be developed for power tariffs. The new scheme aims to plug the deficit resulting from the expected income of the power industry on a commercial basis, and the income realized from the applicable charges.
Commenting on power grids, the minister said that Saudi Arabia was also undertaking feasibility studies for power links with Ethiopia, and other African countries.
The Kingdom is also close to concluding a contract for a Saudi-Egyptian power grid.
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