Saudi Arabia needs SAR 100 billion in power projects to meet demand

Emad K. Mukhalalaty, Managing Director of Altaaqa talks about the major power projects and investments. He estimates that the total investment needed to upgrade the power infrastructure could amount to SAR 100bn.

He says, “This power candle in Saudi Arabia has been burning on both sides. First of all we are working hard to meet the demands and we also need to change or replace old equipment or power plants. The investment requirements is massive on both sides.

This also makes it a reliability issue during the peak summer months here. In the coming 10 years, we need an investment of nearly 100 billion riyals for them to meet the required demand and to exceed it.

However, what needs to be done today is to ration the use of the existing power plants today. We have to make sure the power is not wasted. We live in a cyclical country, where power is needed during the peak summer months for a certain period during the day. For 5 months in a year, we need a minimum of 5 hours of power a day, from 12 to 5.

This makes it difficult for any power provider to make the business model work. Because the plans need to be utilized. Such a cyclical trend impairs the working of the business model, especially because we are enjoying one of the lowest tariffs in the world today. This leads to a lot of wastage. However, this should encourage the industries to thrive and develop. The government and Saudi Electricity are working very hard to ensure that the industrial sector makes the best use of its energy for developing diversification in the country’s economy.”