ELECTRIFYING
TBY talks to Saleh H. Alawaji, Acting Deputy Minister for Electricity & Chairman of Saudi Electricity Company, on privatization plans and key objectives for the sector.
BIOGRAPHY
Saleh H. Alawaji was the Deputy Minister for Electricity from 2003 until 2017. Now, he is Acting Deputy Minister for Electricity and the Chairman of Saudi Electricity Company. He started his career in Saudi Arabian Standard Organization and subsequently moved to R&D in the area of energy. He was previously the Director of the Energy Research Institute in King Abdulaziz City for Science and Technology (KACST). He holds a PhD degree in electrical engineering from Strathclyde University, Glasgow.What is your outlook for electricity prices?
In the past, due to the government's financial capabilities, subsidies were put in place for the prices of electricity to support consumers. However, due to the decline of oil prices in the last two years, the funding of power projects has become a serious issue again, and tariffs need to be revised and increased to prepare the sector for privatization. The government policy as a part of the Vision 2030 is to gradually remove subsidies to the sectors until 2020. In 2016, there was a reasonable increase in electricity prices, and that was the first review of the tariff during the last 15 years for the residential sector. Moving forward subsidies should only be given to the fraction of the population that truly need them. All these changes seek to improve the use of natural resources, increase power generation efficiency, and adjust the habits of consumers to be less wasteful, as well as make the sector more attractive to investors from the private sector.
You are also the Chairman of the Saudi Electricity Company, and the company seeks to move to privatize by the end of the year. What steps will you take in that direction?
Privatization of the power sector is not a decision of the Saudi Electricity Company; it is the decision of the government as per 2030 vision. Around 20 years ago, the first steps were taken in this direction; however, due to number of obstacles it could not be carried out. The serious intention of the government to privatize many utilities or services has reignited the process. It is now under evaluation; a final decision has not been made yet. However, the government's objectives have been laid out clearly. The first steps would be to sell the existing generation assets to investors. In the past our experiences with the private sector in power generation was good and successful. So far, we already have a significant contribution to power generation coming from the private sector. The ultimate objective for the future is to leave all power generation, either conventional or renewable, to the private sector. However, the final decision about that is not yet clear. The general intention is to proceed seriously, and to have first-phase power generation privatized and to sell up to 70% of generation assets within the next five years.
What are the key priorities for your ministry over the next 12 months?
We are focusing on the objectives of the national transformation program, in addition to our usual business plan. This includes expanding our operation to cover the whole country. We also focus on energy efficiency and improve the use of resources on both the supply and demand sides. We also proceed in localization of industries and services related to the power sector. On top of that, we want to propel the use of renewable energy. Developing the power market and improving connections to our neighboring countries is key as the long-term plan is to export electricity. The goal is to eventually improve electricity trading among the six GCC countries, which have one grid so far. In addition, we aim to link this group with other neighboring countries via a connection with Egypt, which will be in place in three years, and after that we can create a regional active power market. We also aim to eventually reach the European power market, which has a lot of potential. That way we can export our surplus, especially during wintertime in Europe. In addition, we could import from other markets during summer peak time. For renewable energy sources, it would also be encouraging to export energy to that market, because it is a priority of the European market to have a clean energy source. After Egypt, we plan to connect with the Turkish network, which will be our door to the European market, as it is already connected to the European grid.
ELECTRIFYING
TABLE OF CONTENTS
Column
YB Pehin Dato Lim Jock Seng, Minister at the Prime Minister’s Office & Second Minister of Foreign Affairs and Trade, Brunei
TBY talks to YB Pehin Dato Lim Jock Seng, Minister at the Prime Minister's Office & Second Minister of Foreign Affairs and Trade, Brunei, on the sector.
read articleReview
A Crude Awakening
The Kingdom has made renewables a critical aspect of its ambitious Vision 2030 effort to diversify its economy and wean itself from a strictly carbon-based diet, not to mention empower local businesses and individuals to take up the mantle and lead the energy sector into the next generation.
read articleInterview
Abdulaziz AbdulKarim, Vice President of Procurement & Supply Chain Management (PSCM) , Saudi Aramco,
TBY talks to Abdulaziz AbdulKarim, Vice President of Procurement & Supply Chain Management (PSCM) at Saudi Aramco, on the IKTVA program, supporting local content, and looking back over a successful year.
read articleInterview
Ayman Abdullah Alfallaj, CEO, Thiqah
TBY talks to Ayman Abdullah Alfallaj, CEO of Thiqah, on how the private sector can keep pace with the speed of public reforms, delivering a strong and lasting value proposition, and integrating the fruits of privatization into the public sector.
read articleFocus: Technology Investments
Investment Calling
A technological revolution is underway in the Kingdom. Already one of the most tech-savvy nations in the Middle East, the Saudi market has long sought a thriving domestic technology and innovation scene. And with Vision 2030, it is on course to deliver just that.
read articleReview
A Hejaz Unhindered
An ambitious series of road and rail projects from the Jordanian border down to the Indian Ocean are slated to open in part before the end of 2017. They bring the Kingdom that much nearer to its goal of greater non-carbon-based economic integration with the world.
read articleInterview
Sulaiman bin Abdullah Al-Hamdan, Former Minister of Transport and Minister, Civil Service
TBY talks to Sulaiman bin Abdullah Al-Hamdan, Former Minister of Transport and current Minister of Civil Service, on an attractive legislative framework for investment, railway linkages, and port developments.
read articleInterview
Rumaih M. Al-Rumaih, President, Public Transport Authority (PTA
TBY talks to Rumaih M. Al-Rumaih, President of Public Transport Authority (PTA) & Acting President of Saudi Railway Organization, on teaming up with commercially committed partners, making sure the Kingdom's land and sea bridges are of the first order, and providing employment for all the Kingdom's inhabitants.
read articleInterview
Nabeel M. Al-Amudi, President, Saudi Ports Authority, and Minister of Transport
TBY talks to Nabeel M. Al-Amudi, Minister of Transport, and President of Saudi Ports Authority, on optimally restricting concession agreements, resolving bottlenecks in the logistics chain, and privatizing as rapidly as possible.
read articleInterview
Khaled Bin Abdullah Al Hogail, CEO & Managing Director , Saudi Public Transport Company (SAPTCO)
TBY talks to Khaled Bin Abdullah Al Hogail, CEO & Managing Director of the Saudi Public Transport Company (SAPTCO), on the importance of strong and rational regulations, knowledge transfers, and unifying public and private transportation networks.
read articleInterview
Imad El-Zein, CEO, Auto World-Sixt Saudi Arabia
TBY talks to Imad El-Zein, CEO of Auto World-Sixt Saudi Arabia, on growing market share in challenging circumstances, partnering with world-class players to boost its local presence, and combining better services with lower costs.
read articleInterview
Saleh H. Al-Ghamdi, Acting CEO, Saudi Air Navigation Services Company (SANS)
TBY talks to Saleh H. Al-Ghamdi, Acting CEO of Saudi Air Navigation Services Company (SANS), on maximizing safe and effective services, effectively increasing the rate of Saudization, and easing the pathway of women into the workforce.
read articleInterview
Khalil Kutubkhanah, CEO, Jeddah Development and Urban Regeneration Company (JDURC)
TBY talks to Ibrahim Khalil Kutubkhanah, CEO of Jeddah Development and Urban Regeneration Company (JDURC), on Jeddah's unplanned settlements, the company's redevelopment projects, and its partnership model with the private sector.
read articleInterview
Dr. Khalid Bin Mohammed Al Shaibani, Deputy Minister, Planning and Health & Director of the Vision Realization Office
TBY talks to Dr. Khalid Bin Mohammed Al Shaibani, Deputy Minister for Planning and Health & Director of the Vision Realization Office, on reforms within the Ministry of Health, the corporatization of healthcare provision, and transformations in care delivery.
read articleInterview
Mohanad A. Dahlan, CEO, University of Business and Technology (UBT) Company
TBY talks to Mohanad A. Dahlan, CEO of University of Business and Technology (UBT) Company, on the evolution of the company, education investments, and upcoming sectors that will need support from the sector.
read articleFocus: Universities
Broad and Deep
As part of the continuing decentralization of higher education in Saudi Arabia, individual universities are pursuing their own paths to grow their faculties, engage with various international stakeholders, and ultimately move toward a more privatized future.
read articleInterview
Rafique Izhiman, Area General Manager KSA Jeddah, Yanbu Hotels
TBY talks to Rafique Izhiman, Area General Manager KSA Jeddah/Yanbu Hotels & General Manager, Intercontinental Hotel Group (IHG), Jeddah, on the role the firm plays in the market, expanding its footprint in the country, and expectations for 2017.
read article