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SEC signs 11 power contracts worth SR2bn

By P.K. ABDUL GHAFOUR JEDDAH: Saudi Electricity Company announced Friday that it has signed 11 contracts worth SR2 billion to set up power transport lines, gas-powered generating units and transformers in different parts of the country to beef up supply to meet growing demand.

"These contracts include expansion of power plants in Wajh and Tabuk, establishment of 380KV and 132KV transformers and a 380KV transport line to link the Dharma plant with the Riyadh network," said Ali bin Saleh Al-Barrak, CEO of the company.

He said the new projects would reduce pressure on the existing power plants and strengthen the efficiency of electricity networks in various cities.

Al-Barrak said the new national budget for 2012 has allocated SR55 billion to carry out a number of electricity projects, adding that it would contribute to providing connections to 350,000 new subscribers.

Demand for electricity in the Kingdom is expect to reach 60,000 megawatts by 2020, up from the current production capacity of 50,000MW. SEC plans invest over $80 billion in generation, transmission, and distribution projects in the next 10 years.

The SEC recently announced plans to launch a transmission subsidiary in January as part of a move to split up into six companies to encourage competition. After the restructuring, SEC will be a holding company and will retain full ownership of the six companies, which include four power generation firms, one firm for distribution and another one for transmission.

The cost of the restructuring program is estimated at around SR200 million, Al-Barrak said. "As a result, the Saudi market will be competitive, which will help increase productivity, efficiency and attract investment to meet high demand," he added.

The CEO said SEC would not float shares of the newly established companies in the Saudi bourse nor eye strategic partners in the near future. The SEC has completed the restructuring program and the companies formed would be in operation by 2012.

Saudi Arabia has announced a massive plan to develop renewable energy resources to reduce dependence on oil and gas. According to a senior official, it intends spend more than $100 billion to establish 16 nuclear energy plants in different parts of the country.

Water and Electricity Minister Abdullah Al-Hussayen has disclosed plans to set up a new solar-powered desalination plant within 18 months.

The Saline Water Conversion Corporation (SWCC), which runs more than 30 desalination plants on the Kingdom's western and eastern coasts, signed an agreement with Hitachi Zosen Corporation of Japan recently to conduct research on making use of solar power for desalination purpose.

"This agreement reflects SWCC's intent to execute the initiative of Custodian of the Two Holy Mosques King Abdullah on exploiting solar energy to operate desalination plants," said Fehaid Al-Sharief, governor of SWCC, who signed the deal with Minoru Furukawa, chairman and president of Hitachi Zosen.

Al-Sharief said the move supports SWCC's strategy to cut down on production expenditures by conducting research on using renewable energy sources to operate its plants.

"This three-year agreement aims at exchanging expertise and knowledge on exploiting renewable energy," the governor said, adding that it includes setting up of a solar energy complex by the Japanese company.

© Arab News 2011