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Saudi Electricity Company plans $9bn 2023 capex

27 March 2023

State utility Saudi Electricity Company (SEC) plans to allocate between SR30bn ($8bn) and SR35bn ($9.3bn) for capital expenditure (capex) in 2023.

This range is at least 10 per cent higher than the company's capex of SR27.4bn in 2022, based on figures published in its 2022 financial presentation.

The lower range of the expected 2023 capex is about 8.5 per cent lower than the figure reported in 2022, the highest reported capex by SEC over the past three years. The higher range exceeds this figure by 7 per cent.

The utility did not provide a specific breakdown of the planned expense, although spending in transmission and distribution infrastructure has dominated the previous three years' capex.

RELATED READ: Saudi Arabia reinvigorates power sector

It indicated plans to grow its fleet, further expand its distribution and transmission pipelines, and reach 23 per cent automation in its distribution grid. 

Vital statistics

SEC reported a 0.6 per cent rise in generation capacity, from 83,036MW in 2021 to 83,539MW in 2022.

Total load increased by 1.8 per cent to 65,301MW from 64,161MW in the previous year.

Meanwhile, the energy produced rose to 191,9640 gigawatt-hours (GWh) in 2022, up 2.6 per cent from 168,985 GWh in 2021.

The company's fuel consumption rose substantially by 8.1 per cent from 322 million barrels of oil equivalent a day (mmboe) to 348 mmboe.

The total number of substations increased from 1,190 to 1,209 in 2022, triggering a 2.8 per cent rise in transformers' capacity to 474,26 megavolt amperes (MVA).

The number of customers also registered a nearly 4 per cent increase from 10.50 million to 10.90 million in 2022.

SEC has historically monopolised electricity generation, transmission and distribution in the kingdom. 

Reforms in the generation sector have resulted in private sector companies accounting for approximately 35 per cent of the kingdom's generation capacity and the integration of modest renewables in the energy mix.

National Grid, formed in 2012, has also taken over the role of operator and owner of the electricity transmission network, which comprises more than 83,000 circuit-kilometres of transmission lines and over 1,000 substations.

In November 2021, the Saudi cabinet approved a resolution for the government to purchase and take over the ownership of Saudi Power Procurement Company (SPPC), which was formed in 2017 as the single buyer of electricity from private generators.

Previously wholly owned by SEC, SPPC is also responsible for the competitive tendering of renewable and conventional energy projects in the kingdom.

Transferring SPPC to the government is in line with the sector's regulatory and structural reforms announced in 2020, which included converting the SR167.92bn ($44.78bn) owed by SEC to the government into an Islamic bond.

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Jennifer Aguinaldo

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