K.A.CARE 1 1
K.A.CARE overview
Saudi Arabia’s Sustainable Energy Program
in a Nutshell
K.A.CARE 2 2
Contents
I. Introduction 4
II. K.A.CARE’s initiatives for achieving its targets 18
A. Nuclear energy program 20
B. Renewable energy program 26
C. K.A.CARE City 31
D. Research development & innovation 35
K.A.CARE 3 3
Saudi Arabia will be witnessing a steady growth in population throughout the
coming decades…
Source: EIU Report 2014
Population growth
26.3
27.1
28
28.9 29
29.8
30.6
24
25
26
27
28
29
30
31
2009 2010 2011 2012 2013 2014* 2015*
Population (m)
Source: CIA World Factbook 2014
Population pyramid
62%
K.A.CARE 4 4
…Accompanied with a rapid growth in the economy…
GDP growth
Source: EIU Report 2014
1,609
1,976
2,511
2,752 2,826 2,864
3,051
-
500
1,000
1,500
2,000
2,500
3,000
3,500
2009 2010 2011 2012 2013 2014* 2015*
Nominal GDP (SR bn)
GDP breakdown
Source: SAMA Annual Statistics Report 2013
Agriculture & Fishing, 2.1%
Mining, O&G, 51.6%
Manufacturing & Refining,
11.6%
Power & Utilities, 1.3%
Construction, 5.5%
Wholesale & Retail, 9.8%
Logistics & Communicatio
n, 5.5%
Finance, Insurance,
Real Estate , 10.6%
Community and other
Services, 2.0%
K.A.CARE 5 5
… However, in order to meet the growing energy demands of the
Kingdom, a sustainable energy program is required…
25
26
27
28
29
30
31
2010 2015 2020 2025 2030
0
100
200
300
400
500
600
700
0
2
4
6
8
10
12
14
2010 2015 2020 2025 2030
Total
Energy
Demand
(TWh)2
260 321 403 520 638
Domestic oil production & consumption3
Millions of barrels per day
The opportunity cost of domestic oil consumption is set to increase from $96 BN in 2010 to $206 BN in
2030 making it necessary to find more economical power sources
Barr
els
per
Day (
Mill
ions)
Population growth1 and total energy demand
1. 2023 onwards population level is a projection based on 2018 – 2023 growth; 2. Total energy demand from generation planning report approximated using 5 year growth; 3. Available for export
is defined as production less consumption; 4. Opportunity cost is consumption multiplied by EIA Annual Energy Outlook 2011 projection; Cash flows have been discounted at a rate of 3%;
Source: Center for Engineering Research (Updated Generation Planning for the Saudi Electricity Sector), Bloomberg (Energy Demand), BP (Oil Supply Data), US-Saudi Business Council Press
Release (Aramco CEO quote) (Consumption data), EIA Annual Energy Outlook 2011 (export oil value)
Discounted
opportunity cost
of consumption
($US B/year)4
96 134 169 194 206
To
tal P
op
ula
tio
n (
Mill
ions)
To
tal E
nerg
y D
em
an
d (T
Wh)
Available for exportConsumptionProductionTotal energy demandTotal Population
Energy demand CAGR : 5%
Source: Center of Engineering Research, Bloomberg, BP, US-Saudi Business Counsel Press Release, EIA Annual Energy Outlook 2011
25
26
27
28
29
30
31
2010 2015 2020 2025 2030
0
100
200
300
400
500
600
700
0
2
4
6
8
10
12
14
2010 2015 2020 2025 2030
Total
Energy
Demand
(TWh)2
260 321 403 520 638
Domestic oil production & consumption3
Millions of barrels per day
The opportunity cost of domestic oil consumption is set to increase from $96 BN in 2010 to $206 BN in
2030 making it necessary to find more economical power sources
Ba
rre
ls p
er
Da
y (
Millio
ns)
Population growth1 and total energy demand
1. 2023 onwards population level is a projection based on 2018 – 2023 growth; 2. Total energy demand from generation planning report approximated using 5 year growth; 3. Available for export
is defined as production less consumption; 4. Opportunity cost is consumption multiplied by EIA Annual Energy Outlook 2011 projection; Cash flows have been discounted at a rate of 3%;
Source: Center for Engineering Research (Updated Generation Planning for the Saudi Electricity Sector), Bloomberg (Energy Demand), BP (Oil Supply Data), US-Saudi Business Council Press
Release (Aramco CEO quote) (Consumption data), EIA Annual Energy Outlook 2011 (export oil value)
Discounted
opportunity cost
of consumption
($US B/year)4
96 134 169 194 206
To
tal P
op
ula
tio
n (
Millio
ns)
To
tal E
ne
rgy D
em
an
d (T
Wh
)
Available for exportConsumptionProductionTotal energy demandTotal Population
Energy demand CAGR : 5%
Total population growth and total energy demand Domestic oil production and consumption (m barrels)
K.A.CARE 6 6
… In a country where the residential sector makes up the majority
of energy consumption…
Source: Saudi Aramco June 2011
Power generation and water desalination consume more
than 50% of Saudi’s energy….
…Where residential consumes the majority of the
utilities output
OilProduction,
8%
utilities, 51%Industrial, 15%
Transportation, 21%
Other, 5%
Aramco, 6%
Industrial, 12%
Residential, 53%
Government, 12%
Commercial, 11%
Other, 6%
K.A.CARE 7 7
… A number of considerations have to be taken in order to identify the proper solution
mechanisms that would develop a sustainable energy sector for the Kingdom…
Considerations Mechanisms to develop a sustainable energy
sector
Steady population and economic
growth
Increasing demand on electricity and
desalinated water
Maintaining the global energy
market’s stability on the long term
Guaranteeing a reliable source of
income to the future generations
The establishment of an integrated
energy economic system in the Kingdom
to generate electricity and desalinate
water by building multi technology power
plants and creating the required
industrial and service based sectors to
support it
Enabling the growth of this economic
sector through the support of innovation
and research & development and also
by the development of the required
human capital
K.A.CARE 8 8
…In 2010 a Royal decree was issued to launch King Abdullah City for Atomic and
Renewable Energy (K.A.CARE), Where the Program’s parameters were carefully
examined…
Value chain
development
Economics
of energy
mix
Electricity and
desalination
demand
patterns
Technology
choices
Regulatory and
physical
infrastructure
requirements
Human
capacity
development
Energy Mix
K.A.CARE 9 9
… Which identified sustainable power generation as a feasible alternative…
Energy mix scenario (TWh) Suggested installed capacity ramp-up scenario (GW)
54 GW
0
100
200
300
400
500
600
700
800
Y0 Y2 Y4 Y6 Y8 Y10 Y12 Y14 Y16 Y18 Y20 Y22
Nuclear Renewables Fossil
27%
53%
% of mix
Electricity production in 2032
NUK program 140
RES program 180
Total alternative 320
21%
Fossil
Renewables
Nuclear
Source: K.A.CARE analysis
0
25
50
75
Y0 Y2 Y4 Y6 Y8 Y10 Y12 Y14 Y16 Y18 Y20
Renewable Nuclear
17.6
54.5
72.1
K.A.CARE 10 10
…To generate significant oil savings …
Conversion rate1:
1 TWh = 1/ (45% x 1.7) = 1.3 MM boe
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Nuclear
Renewables
Total
Electricity production (in TWh)
Nuclear program 8,382
RES program 4,920
Total Alternative energies 13,302
Projection bias
beyond 2040
Total barrels of oil equivalent saved (billion barrels) Yearly barrels of oil equivalent saved (‘000 Mboe)
Source: K.A.CARE analysis
17.6 GW
54 GW
10.9
6.4
17.3
0
2
4
6
8
10
12
14
16
18
20
Nuclear Program RenewablesProgram
Total
Total program lifetime270 years 64 years
K.A.CARE 11 11
…And also have a wider economic Impact on GDP and employment…
1. KSA gross domestic product projections are based on IMF forecasts; alternative energy impact is measured as yearly contribution to business-as-usual KSA GDP
2. Program lifecycle calculated as the time between the start of the first construction and the last decommissioning year
Source: International Monetary Fund; Oliver Wyman analysis
K.A.CARE 12 12
… Through the proper localization strategy of nuclear energy components…
Nuclear energy components targeted for localization (% of capex and opex)
1. Based on average score from market, financial, KSA impact dimensions; main drivers include NPV, IRR and payback calculations
2. Based on average score from technology and KSA gaps dimensions; main driver is feasibility for KSA to compete globally
Note: NNG = Non nuclear grade
Source: Oliver Wyman analysis
K.A.CARE 13 13
…as well as the localization of renewable energy components…
Renewable energy components targeted for localization (% of capex and opex)
K.A.CARE 14 14
…in a time frame that would allow the Kingdom to capture maximum
value of the sustainable program
Localization roadmap
K.A.CARE 15 15
Contents
I. Introduction 4
II. K.A.CARE’s initiatives for achieving its targets 18
A. Nuclear energy program 20
B. Renewable energy program 26
C. K.A.CARE City 31
D. Research development & innovation 35
What are the initiatives KACARE is taking to achieve its targets?
K.A.CARE 16 16
The K.A.CARE strategy covers a number of initiatives to develop
sustainable power generation…
Nuclear program K.A.CARE’s strategy is to develop a range of nuclear power plant projects to sustain the base load demand. The
first step is to prepare the requirements for first wave of NPPs
Renewable
energy program In order to ensure the optimum efficiency in the development of the sector, a framework for energy generation
and procurement is being established to allow for the most competitive renewable generation market.
Atomic regulatory
framework To ensure the safety and security of the nuclear power plants, an independent regulator, inline with international
guidance, is being setup currently within K.A.CARE.
K.A.CARE City A physical city is being developed to host the National Laboratories and the supporting cluster of sustainable
energy components in collaboration with the private sector to ensure proper tenant attraction and efficiency of
assets developed.
Research,
Development and
Innovation
The National Laboratories will be the anchor of the physical city micro-economy and the driver of innovative
solutions towards the technologies associated with sustainable energy. It will also enhance the value chain
through the commercialization of patents generated by the RDI.
All initiatives are developed on a sustainable economic framework that ensures efficiency and
maximize impact on the energy value chain in Saudi Arabia
K.A.CARE 17 17
… All initiatives are developed to maximize public/ private participation and
ensure a steady growth of Saudi Arabia’s economy…
In order to ensure the sustainability of the energy
program, K.A.CARE has:
Established a framework for competitive procurement to for
the renewable energy sector.
Identified localization opportunities within the value chain of
the nuclear and renewable energy industry.
Provide a workforce development strategy through the
Human Capacity Building Program that defines the required
skills, competencies, and behaviors by sector and over time
K.A.CARE 18 18
… In line with the Saudi Arabia’s energy demand projections
Nuclear energy program Renewable energy program Physical city
K.A.CARE 19 19
Contents
I. Introduction 4
II. K.A.CARE’s initiatives for achieving its targets 18
A. Nuclear energy program 20
B. Renewable energy program 26
C. K.A.CARE City 31
D. Research development & innovation 35
Beginning with the Nuclear Energy Program…
K.A.CARE 20 20
.. Through careful study of the Nuclear Program requirements…
K.A.CARE is preparing for the safe, secure
and efficient introduction of Nuclear Power
through:
1. Preparation of the supporting
infrastructure
2. Preparation of the internal
requirements
K.A.CARE 21 21
…. And the preparation of the supporting infrastructure…
The introduction of Nuclear Power is a complex procedure and as such K.A.CARE has
been focusing on the supporting infrastructure necessary for its safe introduction
Supporting
infrastructure
Identifying changes to
the grid necessary to
accommodate NPP
Grid Impact
The Nuclear industry is
heavily regulated
worldwide and several
Bilateral agreements
need to be in place to
facilitate its introduction
Bilateral Agreements
Understanding the
characterization for
each proposed site
Site preparation
A critical tenant of
K.A.CARE’s strategy is
to ensure localisation
wherever possible and
practical
Local Supply Chain
K.A.CARE 22 22
… as well as the preparation of the internal requirements
K.A.CARE has also been preparing the internal requirements that must be developed
before engaging with the market to construct and operate Nuclear Power Plants
Tech
no
log
y S
ele
cti
on
Cri
teri
a
Internal Requirements
Ow
ner
Re
qu
ire
me
nts
Do
cu
me
nta
tio
n
Pro
cu
rem
en
t A
pp
roa
ch
an
d S
tra
teg
y
Human Capability Development
K.A.CARE 23 23
An independent atomic regulator is required…
An independent atomic regulator
Laws
Regulations
Regulatory Guides
Increased
Frequency
of
Revision
Increased
Detail
Revision & Validation
Against IAEA Requirements
Promulgation &
Empowerment of regulator
Completion, Finalization
Revision & Validation Publishing by regulator
Completion
Revision & Validation Publishing by regulator
K.A.CARE 24 24
… that is built around a solid governance framework to ensure
the safety, security, and efficiency of the nuclear power plants
The framework outlined:
– Regulatory approach
– Roles of Saudi Arabian atomic regulatory authority
– Saudi Arabian atomic regulatory authority divisional functions
– Required skills and competencies
– Saudi Arabian atomic regulatory authority preparatory tasks
– Approach to licensing nuclear facilities
– Partner regulators, and technical and legal support
K.A.CARE 25 25
Contents
I. Introduction 4
II. K.A.CARE’s initiatives for achieving its targets 18
A. Nuclear energy program 20
B. Renewable energy program 26
C. K.A.CARE City 31
D. Research development & innovation 35
In parallel, KACARE will be launching the Renewable Energy Program …
K.A.CARE 26 26
… Built around a comprehensive Renewable Energy Framework …
Localization
Job creation
Training
Research, Development & Innovation
Sector Leverage Strategy
Legal and Regulatory Structure
Procurement Models
Financial Models
Procurement schedule & milestones
Stakeholder analysis & integration plan
Bid documents, manuals, application forms, & other templates
Procurement Process
Off-taker
Clear Procurement & Communication channel
Facilitation Services
Other requirements
Supporting Tools Renewable Energy
Framework
K.A.CARE 27 27
… That capitalizes on a sector leveraging strategy…
The sector leveraging strategy is to deliver on the broader macroeconomic & social
goals under K.A.CARE mandate
This strategy is meant to leverage the Kingdom’s sustainable energy spend in a
balanced manner to fulfill national objectives
Localization
Research, Development & Innovation
Job creation
Training
K.A.CARE 28 28
… and lays out a clear and transparent procurement process…
K.A.CARE will launch the Kingdom’s RE Procurement plan over several
“rounds”, to enable the achievement of the following:
Maintain consistency with K.A.CARE energy targets
Allow for all RE related stakeholders to build their expertise required to
support the program’s implementation
To obtain lessons learned from each round & apply them to the
proceeding rounds
Allow the gradual growth of the local RE industry & international
community to support the program’s implementation
Allows validating the existing globally benchmarked prices across multiple
technologies while applying these prices to the local market context
EPC
Multiple procurement “rounds” conducted every 1 to 2 year
periods, where K.A.CARE will identify the targets,
capacities & eligible technologies for each round
Solar PV CSP Wind Geothermal
Procurement Models
Eligible Technologies Rationale for multiple procurement rounds
IPP
Waste to Energy
Procurement rounds
Off-taker
Single Procurement & Communication channel
Facilitation Services
Other requirements
Supporting Tools
K.A.CARE 29 29
… allowing for multiple technologies to be part of the energy mix to ensure
optimum effectiveness and efficiency
K.A.CARE
Negotiated Prices
Sustainable Energy Developers
Main Offtaker
Contract
(Facilitation)
(Procurement Leveraging Strategy)
K.A.CARE 30 30
Contents
I. Introduction 4
II. K.A.CARE’s initiatives for achieving its targets 18
A. Nuclear energy program 20
B. Renewable energy program 26
C. K.A.CARE City 31
D. Research development & innovation 35
A physical city is being constructed that would bring together the seed cluster
of the sustainable energy program…
K.A.CARE 31 31
…Playing a central role in achieving the sustainable energy program objectives…
The City will play
a central role in
achieving
K.A.CARE’s
objectives by
establishing a
defined center for
this new industry
This is essential
for Saudi Arabia
in order to
develop the local
value chain and
human capacity
required to serve
the sector
An innovation ecosystem mixing entrepreneurs and
researchers that allows to build capabilities and
enables research advancements in target sectors,
fostering the development of a knowledge-based
economy
A home for companies spurring the development of
atomic and renewable energy sectors in the Saudi
Arabia, promoting energy efficiency and resource
sustainability, and contributing to the sustainable
development of the country
A model to demonstrate an improved quality of life
and sustainable living that can be replicated across
Saudi Arabia
A place to kick-start the deployment of renewable
energy generation and to pilot innovations under
local conditions
Innovation and Capability Building Companies and Employment
Replicable Sustainable Living Energy Generation
K.A.CARE 32 32
… Through creating a cluster of sustainable energy research, development, and
industrial development, offering a comprehensive lifestyle to its tenants…
Amenities Full set of social and visitor
amenities enabling an improved
quality of life and economic
development
Production
Engine
Platform for the deployment of pilots
of innovative renewable energy
technologies
Light manufacturing with strong
R&D ties
Enabling
Infrastructure
State-of-art infrastructure with
the deployment of innovative
and sustainable technologies
(e.g., district cooling, smart
canopy, transportation)
Companies
Cluster
Residential
Housing
R&D and
Innovation Hub
State-of-the-art business facilities to host companies
focused on the atomic, renewable energy, energy
efficiency and resource sustainability sectors
Housing offering mix that caters to all income levels
and preferences
Sustainable building design and efficient energy
systems to demonstrate improved sustainability
National Labs to drive research advancement
in core sectors
Development of capabilities through graduate
and technical programs
Key city components
K.A.CARE 33 33
… In a time line that is consistent with the Industry’s development…
Phase 1A Phase 1B Phase 2
Ground Breaking Yr 0 Yr 3 Yr 4
Completion
Infrastructure Yr 3 Yr 6 Yr 7
Start Occupancy Yr 4 Yr 7 Yr 8
Completion Yr 6 Yr 9 Yr 10
K.A.CARE 34 34
Contents
I. Introduction 4
II. K.A.CARE’s initiatives for achieving its targets 18
A. Nuclear energy program 20
B. Renewable energy program 26
C. K.A.CARE City 31
D. Research development & innovation 35
… Anchored by the National Laboratories of Research & Development of
the different technologies of sustainable energy…
K.A.CARE 35 35
… Which will play a pivotal role in the advancement of sustainable energy
technologies…
Funding
• Gov’t Funds
• Energy Rate Fees
• Private Endowments
National Strategy
• Mission / Vision
• Advisory Committee
• Technology Foresight
Government
• Regulatory Support
•Management Support
People
• Existing Engineers
and Managers
• International Hires Industry Formation
• New Ventures
• Technical Assistance to
Companies
• Commercial Partnerships
• Intellectual Property
Energy Workforce
• Researchers
• Managers
• Plant Operators
Knowledge Production
• Publications
• Collaborations
• World Class Research
Outcomes Technical Program Operations
R&D
Planning,
Agenda
Economic,
Standards,
and Policy
Analysis
Staffing ,
Equipment,
Buildings,
Operations
Capacity
Building
Scholarships,
Outreach,
Training
R&D Program
Nuclear
Technology,
Renewable
Energy,
Energy Efficiency
Industrial
Development
Program
IP Mgmt.,
Business
Development
Inputs
K.A.CARE 36 36
…in an effort to position Saudi Arabia as a global leader of innovation in
sustainable energy
National Sustainable
Energy Policy Analysis
Training & Education Nuclear Regulatory Authority
Sustainable Energy
Industrialization
Sustainable Energy Portfolio National Energy
Research Complex
KA-CARE
Sustainable
Energy
National
Laboratory
K.A.CARE 37 37
For More Information, Please Visit our Website
WWW.KACARE.GOV.SA