Saudi Electricity Company’s Growth Opportunities
The Saudi Electricity Company (SEC), the largest producer, transmitter and distributor of electrical energy in the Middle East and North Africa, is committed to fostering future growth opportunities through continued substantial investments and ultimately leading to the optimization of the energy mix for electrical power generation in line with the objectives of Saudi Vision 2030.
SEC continues to implement a series of leading projects to modernize and enhance the electricity distribution networks and transmission lines. These distinctive investments focus on deploying advanced technologies and assets to enhance the reliability and efficiency of the electrical grid, meeting the growing demands of developmental, economic, and urban initiatives in the kingdom.
SEC continued to deliver strong financial performance in the first half of 2024. The company reported a 15.5% increase in its revenues for H1, 2024, reaching SAR 38.2bn, with net profit rising by 16.6% to SAR 5.2bn compared to the same period last year.
Capital project investments in H1, 2024 rose by 62.5%, reaching SAR 25.1bn, compared to the same period last year. The company successfully completed several prominent financing deals, with a total value of nearly SAR 18.5bn since the beginning of 2024, supporting ongoing investment in future growth.
The company noted that the first half of this year witnessed significant growth in demand for electricity services compared to the same period last year, with peak load on the grid increasing by 9.5% to 72.9 GW, and electricity consumption rising by 6.1% to 146 TWh. The company added more than 165,000 new subscribers.
SEC is planning a SR 472bn ($126bn) capital expenditure plan over the next six years to enhance the kingdom’s power generation, transmission and distribution infrastructure.
The largest component of this spending drive is the transmission sector, with a planned investment requirement of SR 351bn. This is split into five main elements including extra-high-voltage and high-voltage substations, extra-high-voltage and high-voltage overhead lines, underground extra-high-voltage and high-voltage cables.
A total of SR 116bn is envisaged for the distribution sector, comprised of SR 98.2bn of underground cabling networks, SR 15.9bn of overhead lines and SR 1.5bn for control and command centres.
SEC dedicated only SR 6.2bn to power generation projects as most new electricity production plants now tendered by the Saudi Power Procurement Company (SPPC) under the kingdom’s public-private partnership (PPP) framework. In 2022, SEC completed divesting its full interest in SPPC, which has enabled it to bid for contracts to develop and operate power generation plants, in addition to operating the kingdom's power transmission and distribution network.
Saudi Arabia is on track to achieve its goal to reduce carbon emissions by 278 million tonnes per annum (mtpa) by 2030. The kingdom aims to achieve an optimal energy mix for electricity production by having gas and renewable energy at approximately 50% each by 2030. When achieved, this will displace approximately 1 million barrels of liquid fuel currently used.
The production capacity of renewable energy projects under construction in the country exceeds 8 GW, with an additional 13 GW of renewable energy capacity in various stages of development across multiple projects.
SEC is in talks with the kingdom's principal buyer, SPPC, for the development of five gas-fired generation plants, each with a capacity of between 1,500 MW and 2,000 MW. This aligns with SEC's plan to develop approximately 30,000 MW of gas-fired capacity within and outside Saudi Arabia.
Additionally, within the framework of its ESG efforts, SEC has initiated its tenth fuel-to-gas conversion project with the aim of enhancing thermal efficiency and diminishing the carbon footprint associated with the target power plant’s energy production.
SEC is successfully implementing its growth plans by making significant investments. Concurrently, they address the escalating need for electricity while advancing the sustainability efforts within the company and the broader sector, ensuring alignment with the national sustainable development goals and the company's ambition towards carbon neutrality by 2050.
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