Policy Framework for the Saudi Arabia Smart Grid

Policy framework for the Saudi Arabia smart grid (Challenges: increase in population, residential consumption is the main driver, saving fuels for exporting, subsidized electricity rates)
Why is Smart Grid needed in Saudi Arabia?

Today the Saudi Arabia is a country with a population of 29.38 million people. In terms of energy it is characterized by a diverse scheme. On the one hand, the oil natural resource is widely available providing the country with safety in terms of fuel reserves burnt for power generation. An astonishing increase in population and a rapid expansion of the industrial sector along with the overall growth of the economy are challenging the existing energy infrastructure in terms of electricity. More specifically, there is electricity demand has been rising due to not only the reasons mentioned above but also to the high usage of air conditioning during summer and the quite heavily subsidized electricity prices (EIA,2013, Riyadh, 2013). It should be noted here that the residential sector is the main driver of the electricity consumption.

For the time being, KSA had announced the largest electricity generation plan among the developing countries in the Middle East. The country is planning to increase the capacity from 55 GW to 120 GW by 2020, while further increases are planned for 2032 in order to follow the increase in peak demand (a steady growth of 5% is expected).

Electricity market structure

The biggest company providing electricity is the Saudi Electric Company (SEC). However, there is a second largest generator of electricity called Saline Water Conversion Corporation (SWCC). This is a state-owned company and produces most of KSA desalinated water. There are also some private-owned water...

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...wer system. Additionally, the T&D operators need to propose the “Investment Plan” to the Regulator and Ministry of Water and Electricity (MOWE).

• Describes the functional requirements and technical properties that are at least needed. Those could be performance requirements, metering and networking functionalities, privacy issues, security and standards used.

• Allows T&D operators to use different suppliers or their own assets and equipment to implement the Smart Metering system.

Define priorities in terms of which urban areas will firstly be connected to the Smart Metering system. This prioritization is occurring because of the significant time that takes to implement a Smart Grid. Therefore, it is important to proceed in urban areas where the consumption is higher, the losses are significant and/or there is a need to upgrade the system by adding new lines.