Towards Sustainability

of the power sector

قطاع نحو استدامةالكهربائية الطاقة

Critical Value of SEC to the Kingdom

Power Sustainability to the Sacred Cites

Contributing to the Real Image of Saudi Arabia

SEC Contribution to KSA Economical Growth KSA will maintain its vital role as global supplier of secure oil and G20 member

What is SEC to The Kingdom & The World

In reality, SEC is the battery of global economy

!!

1) Supports Kingdom Commerce & Industry including sustainable Export of Hydrocarbon and Petrochems to the world.

2) The largest utility in the MENA region and one of the largest globally

3) Direct economic driver to KSA, to maintain its position as one of the largest 20 global economies

WHAT SEC MEANS TO THE KINGDOM AND THE WORLD Kingdom Pride:

• SEC is the largest in the MENA Region and world

• Installed capacity 62 GW• 56,000 km of

Transmission (circle the globe)

• 500,000 km of distribution lines

Citizens of the Kingdom• 7.3 million Customers• Upto 500,000 New Customers

per year• SEC has Electrified 99% of

rural areas• 13,000 Villages• Growing at the fastest pace

in the world, 8% growth• 33,000 SEC direct Employees

Strategic • Savings towards 1.5 MBOE/D• Introduce smart grid and smart meters• Interconnection regionally & globally

GCC INTERCONNECTION

EGYPT INTERCONNECTION

EUROPE INTERCONNECTION

THE ENERGY VALUE CHAIN FROM WELL HEAD TO CUSTOMER

SEC is a major component in the energy value chain – producing the much needed electricity to move theeconomy forward and for the production of water

USA China S Korea Singapore SpainNorway MalaysiaBrazil IranRussia Venezuela UK Canada

Sim

ilar s

truc

ture

Sim

ilar o

bjec

tives

Selection criteriaSelection criteria

Large resources1

Demand outpacing supply2

Development level3

Geography & culture4

Geopolitical weight5

Competitive NOC6

Increase efficiency7

Diversify fuel mix8

Grow non oil & gas sectors9

Build expertise10

Impact on environment11

Overall fit for benchmark

Countries identified for benchmarking

Examples of failed strategic attemptsExamples of failed strategic attempts

Pockets of excellencePockets of excellence

N Zealand

Iran

Germany Germany: EfficiencyNZ: Renewable

Japan: R&D structureFrance: Leadership

UK: Integrated servicesIran: Fuel SubsidiesKorea: Localization

Norway: Governance

UK

Japan France

Indonesia NigeriaMexico

Korea Norway

2

3

1

2

3

4

5

6

7

8

Brazil Malaysia

NorwayChina Comprehensive Strategy Strong governance

Success storiesChallenges faced

USA

1 Country deep diveCountry deep dive

Source Aramco

ANIMATE

What are we solving for ?? • Meeting Demand• Diversity of supply • Security of supply • Reducing hydrocarbon burning• Environmental Compliance• Maximize revenue • Increasing the standard to living • Optimizing the cost of energy• Leadership in the Kingdom and the world

SEC IS SOLVING FOR ALL FO THE ABOVE !!!!!!

Is this challenge?oryes No

STP regional roadshow - English.pptx 11

SEC RESPONSE TO ADDRESS THE OPPORTUNITY THROUGH THE STRATEGIC TRANSFORMATION PROGRAM (STP)

ANIMaTE!!

STP regional roadshow - English.pptx 12

ANIMaTE!!

IMPACT OF STP / OUTCOME / Our response – linking it all together

Generation (meet demand )

Transmission

• 600,000 efficiency • Expansion to meet demand • 4000 MW per year • 300,000 renewable

• 54 KM • Increase capacity from 105 GVA in year 2000 to 203

GVA in year 2013. • Interconnection Local and international

Distribution• 146 km for overhead lines and 92 km for

underground cables• Increase capacity from 93GVA in year 2000 to

189 GVA in year 2013.

2 MMBDOE increase by 2030 2 MMBDOE increase by 2030

The cost of doing nothing: Future investments required over a period of 20 years

46$ Billion3X1 BSCFD Sales

Gas

3X 0.5 MMBD Refineries

30$ Billion

$35 Billion2 GW X10 Power

Plants

6$ BillionDistribution

System

50$ Billion5X300 MBD Crude

Oil Facilities

$165B in capex

$110B in operating cost

$7B in carbon credits

Total ~$300 B

Saudi Aramco’s incremental costs:CapEx of $131BOpEx of $88B

Utilities incremental costs:CapEx of $34BOpEx of $22B

Source Aramco

STP regional roadshow - English.pptx 15

SEC Quick Facts

1. Availability of power to serve 7.3 m customers is 99.9%2. SEC has one the lowest residential tariff globally3. The installed capacity in Kingdome is 62GW while total GCC capacity is 61 GW4. UAE Tariff subsidy serves only 20 % of total population(UAE citizen only ) while in

Saudi 100 % 5. SEC Saudization is 87%6. Sec is one of the largest 5 publicity trade companies in Kingdome stock market7. Annual growth in demand reach 8%8. Total Asset Value SAR 307 billion9. Telecom Example 10. SEC customer base split by consumption: residential (50%), industrial (17.4%),

commercial (16.3%), governmental (12.6%), and other (3.6%)

STP regional roadshow - English.pptx 16

SEC to the world and kingdom

STP regional roadshow - English.pptx 17

Citizens of the Kingdom Kingdom & World Pride Strategic

• 7.3 million Customers• Upto 500,000 New

Customers per year• SEC has Electrified 99% of

rural areas• 13,000 Villages• Growing at the fastest

pace in the world, 8% growth

• SEC is the lowest provider and tariff structure

• Job Creation -Local Gas Turbine servicing and manufacturing (GE / Siemens)

• 33,000 SEC direct Employees

• Local contractor and manufacturers

• SEC is the largest in the MENA Region

• One of the largest utilities in the world

• Installed capacity 62 GW• 56,000 km of Transmission

(circle the globe)• 500,000 km of distribution

lines• All international companies

want to work with SEC• Strategic agreements with

EDF, TEPCO, KEPCO, EON

• SAR 50 Billion Expenditure per year

• SAR 10 billion local direct purchase

• SEC is the first KSA entity to launch 30 yr global Sukuk

• SEC Rating AA-

• Challenges converted to Opportunities

• Transformation on all activities while keeping the lights on.

• Daweyat fiber optic network (32,000 km) spanning the kingdom.

• Interconnection regionally • Going global• Inviting Global utilities to

participate in the local market

• Strategic Transformation of utility business to best in class.

• Strengthen the Kingdom name globally.

• Increase supply efficiency to save 600,000 BPD

• Participate in Demand reduction equivalent to 900,000 BPD

• Diversifying the energy mix – renewables …. Saving 300,000 BPD

• Introduce smart grid and smart meters

STP regional roadshow - English.pptx 18

18

STAKEHOLDERS – WAY FORWARD

WE STILL HAVE CHALLENGES

WE WILL WORK WITH ALL OUR STAKEHOLDERS …..

2.8 % of Fiscal Budget -

STP regional roadshow - English.pptx 19

19

END

• TO create success the entire supply chain and SEC’s position within the entire value ---

• The supply chain

• Include Value Chain Pic / Supply / Demand

SEC is proud to Provide the Kingdom with the need Power to drive prosperity and development for the economy, the society and the Kingdom as a whole, for :1) Export of hydro carbon to the

world2) Keeping the lights on, water

flowing and economy growing,

3) Providing power for schools, universities, hospitals, commercial centers, critical facilities, government, military etc..