Saudi Electricity Company awards substations PMC contract
26 September 2024
Saudi Electricity Company (SEC) is understood to have awarded engineering and consultancy firm Tractebel, a division of France's Engie, a project management contract (PMC) for dozens of ongoing power transmission and distribution (T&D) projects in the kingdom.
The work scope entails project managing about 34 engineering, procurement and construction (EPC) contracts for the construction of substations and overhead transmission line projects in Riyadh and other areas in the kingdom's central region.
According to an industry source, about seven EPC contractors are working on these different projects.
It is expected that SEC could award separate PMC contracts for several dozen other T&D projects that are under way in the kingdom's eastern and western regions.
There are over 200 power T&D projects valued at an estimated $21.4bn that are under construction in Saudi Arabia, according to data from regional projects tracker MEED Projects.
A total of 78 projects worth $12bn are in the tendering phase, while over a dozen are in the planning phase.
T&D projects bonanza drivers
Saudi Arabia aims for renewable energy capacity to account for 50% of its electricity installed capacity by 2030.
As of September, solar and wind power plants with a total combined capacity of about 3.5GW have been completed in the kingdom, a further 9GW are under construction, and over 10GW are under bid or about to reach financial close.
The addition of renewable power into the grid, which has suffered from decades of underinvestment, is driving the kingdom's T&D project activity, according to experts.
This is in addition to major water desalination, real estate development and industrial projects, which often require the installation of new substations and overhead transmission lines.
The kingdom's liquid fuel displacement programme and its need for baseload capacity in the face of increased renewable energy capacity entering the grid require the construction of new – or the expansion of several existing – gas-fired power plants, all of which need to be connected to the grid.
Saudi Arabia has also awarded several high-voltage, direct current (HVDC) contracts in the past 12-18 months to enable stable and secure grid interconnection between its various regions, many of which are implementing major economic expansion and tourism programmes.
Crucially, Riyadh aims to build domestic artificial intelligence and semiconductor sectors as part of its long-term economic vision, both of which will require comprehensive energy, telecommunications and data bandwidths.
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