Energy & Water is growing rapidly and is considered one of the most important strategic sectors in the kingdom. This led to the emergence of renewable energy as a key objective in Vision 2030 with focus on efficiency as an important element in sustainable growth. The Kingdom currently has the largest desalination market in the world, with aim of increasing the reuse and water treatment market. As well as a leadership role in finding solutions and innovations related to water technologies and research.
Based on a clear foundation and legislation in the production, transmission and distribution of electricity and water, to ensure the rights of investors and consumers, Saudi Arabia is considered one of the strong and serious committed countries with the ongoing privatization and localization in both energy and water sectors In addition, growing demand for electricity and water in the kingdom increases further due to the constant sustainable growth in the industrial, residential and commercial sectors.
Fatcs & Figures
Energy And Water Value Proposition
- Unlimited natural solar and wind endowment
- Saudi Arabia lies in the middle of the sunbelt, it ranks 6th worldwide in solar energy. Therefore, has a high potential of solar irradiation across most provinces.
- Saudi Arabia is located within the Hadley cell, it ranks 13th worldwide in wind energy. Therefore, has a high potential of wind energy along the northeast, central regions and mountains in the western region.
- Ambition to significantly grow the sector
- Establishment and growth with an initial target of generating 27.3 GW of renewable energy by 2024 and 58.7 GW by 2030.
- 30% Localization Requirement of the Value Chain in 2018, Increased to 40% - 60% in 2019.
- Access to under-supplied regional market
- Beyond Local demand, KSA Manufacturers Have the Opportunity to serve 17 GW in GCC Region and reaches to 70 GW in MENA region.
- Saudi Arabia has a geographical advantage, located at close proximity to the GCC countries and thus has a logistical advantage (i.e. lower transportation cost, shorter delivery time).
- Advanced Knowledge-based market
- Advanced Research & Development (R&D) ecosystem and innovation with pioneer projects with different entities.
- Comprehensive market information database such as the renewable energy atlas and the supplier database(wesupplyrenewables.com.sa).
- Investor Centric Ecosystem
- Clear governance, Regulatory framework, and Incentives to attract private sector investors.
- Facilitation to start and grow businesses to ensure that the journey and process are easy for investors.
Saudi Arabia is widely recognized as one of the leading and most advanced nations in the water sector globally.
The Kingdom is the global leader in desalination, the GCC’s largest market for water reuse and a pioneer in water technology innovation, scale and research. Numerous investment opportunities await in this sector, whether in existing waste-water treatment assets or new projects like the world’s first solar powered desalination plant. This sector also benefits from the support of a committed government and an independent regulator, making KSA one of the most attractive places in the world to invest in water.
Outstanding Growth Opportunities
Saudi Arabia's water sector has seen a remarkable annual growth of 8% per annum and is showing no signs abating. The current total daily capacity of 4.6 million m3 (including desalination and re-use) prompts a valuation of the sector at over SAR 48.75 billion (US $ 13 billion). The water sector owes its growth to strong industrial output, steady population increases and a huge consumption rate per capita.
Saudi has one of the highest rates of water consumption per capita globally. At 300 liters/ day, Saudi Arabia consumes twice as much water as the UK. Total investments are set to exceed SAR 187 billion (US $ 50 billion) by 2020, going towards water production, infrastructure and water related services.
Opportunities for growth here are therefore considered to be outstanding, offering peace of mind to even the most hawkish of investors.
Global Leader in Desalination
Saudi Arabia is the largest desalination market in the world producing around 4 million cubic meters of desalinated water per day. With 28 desalination plants to its name, KSA has the most of any nation yet is pushing to triple the capacity of desalination production by 2025 to reach 8.5 million cubic meters per day.
Tremendous opportunities await the private sector, with approximately SAR 300 billion (US $ 80 billion) expected to be invested in desalination projects over the next 10 years. Saudi Arabia is truly leading the way in this field and is well positioned to maintain this course for the foreseeable future.
Leading beyond desalination
Water reuse is playing an increasingly important role in the pursuit of sustainable water resources management. Saudi Arabia already has a thriving water reuse industry and aims to become the GCC’s largest market by tripling its current level of production to 1.9m m3/day by 2020. Ambitious targets of 90% water reuse have also been targeted by 2040, with aspirations to transform the existing and planned wastewater treatment assets into source water supplies for the industrial sector. In addition, the Kingdom officially launched a water reuse initiative to create an environmentally friendly, diversified source of water and to promote the financial sustainability of the long-term market. There are multiple projects and initiatives being implemented across this sector making the water reuse market very attractive to the outside investor.
Ongoing Privatization and proven commitment
KSA boasts the largest number of desalination plants in the world and has plans to privatise 17 of its SWCC plants to achieve 50% privatisation of the overall desalination market. Numerous investment opportunities will arise from these initiatives as the government continues its plan to diversify the desalination market. Additionally, more than 75 water and sewage projects worth more than SAR 2 billion (US $ 550 million) were signed by the government in the past 2 years, highlighting its proven commitment to the sector.
Investors can also be assured by the Electricity and Cogeneration Regulatory Authority (ECRA), which was established as an independent regulator for the water sector and by the Water and Electricity Company (WEC), which acts as a principle buyer in the water sector.
Pioneer in innovation, scale and research
KSA has long been established as a pioneer in the water sector. Through its well-rooted companies, advanced R&D centres and experienced talent pool, the Kingdom prides itself in its cutting-edge approach to sustainable water solutions. Boundaries are being pushed as Advanced Water Technology (AWT) is developing the world’s first solar powered desalination plant. The same can be said for Saline Water Conversion Corporation (SWCC) research institute, which is heavily engaged in a variety of projects to enhance membrane technology and desalination production cost efficiencies. Furthermore, Saudi Aramco is investing in leading water technology companies (e.g. OxyMem for water), placing Saudi Arabia at the heart of technological advancement when it comes to water.
- Saudi Arabia is one of the largest energy consumers with increasing electricity tariffs
- Saudi Arabia ranks 3rd within the top 20 largest producers worldwide for energy with 9,333 Kwh consumption per capita.
- Electricity tariffs increased twice over the past 3 years and expect to increase in the future.
- Estimated $ 20B investment needed to meet increasing energy demand by 2020.
- Government commitment to support the development of the Energy Savings sector
- Leveraging Saudi Energy Efficiency Center (SEEC) as the key entity and unique interface responsible for energy efficiency sector.
- Introducing new regulations (e.g. ESCO licensing, legal framework, incentives) and standards (e.g. measurements) to facilitate investments.
- Investing in human capital for building capabilities in the energy sector (e.g. certifications and training) and promoting public awareness
- Tarshid established to facilitate the public building energy savings
- Super ESCO, “Tarshid” a newly-established company with approx. $500 M capital, is responsible to support the development of energy projects in the public sector partnering with private investors (ESCOs).
- Royal decree gives Tarshid an exclusive mandate to retrofit all government entities and public facilities Leveraging the Royal Decree mandating all government entities to undergo energy efficiency retrofits.
- Plan is to manage the energy retrofit of government and public buildings more ~260,000 government subscribers.
- Large and growing demand for energy
- Establishment of new major projects in KSA such as, Al Qidiya, NEOM and The Red Sea will drive greater energy consumption.
- Growth of electricity consumption is driven by 3 sectors; Residential, Commercial and industrial and is expected to grow more than 40%.
- Liquid fuel-based generation will be phased out by natural gas which will drive greater and more efficient investment opportunities.
- Solid foundation for KSA energy sector
- Good government track record in developing the sector with attractive incentives and well established
- Strong local supply chain to provide required raw materials and access to human capital to support businesses.
- Prime position for KSA to establish energy network linkages with neighboring countries and access to export markets.
- Commitment to localization and involvement of private sector
- By 2021, SEC plans to increase the capacity of generation total to 91,000 MW and enhancing transmission network lengths and reliability by adding 21,500 km.
- The plan includes adding 162,000 km of distribution lines and bringing the total number of customers to more than 10.8 Million.
- SEC's localization program is already supporting growth in the number of local factories with a significant increase of 129% in local factories for electrical equipment.
1- Large and growing market
The Kingdom of Saudi Arabia is the world’s largest crude oil producer and possesses the largest oil reserves. With the big crude oil revenue, KSA has been witnessing high population growth rate, rapid industrialization and fast urbanization, which have been dramatically accelerating the waste generation in the kingdom. Moreover, social-economic growth, rise of standards of living and large number of visiting pilgrims every year have resulted in substantial increases in waste growth rate to reach 52 million tons of total waste annually.
2- Government commitment to unlock the sector
There’s an emphasis on the importance of increasing the efficiency of waste management, establishing comprehensive recycling projects and reducing all types of pollution to achieve the environmental sustainability for a vibrant society with fulfilling lives. KSA has shown solid commitment to unlock & transform the waste management sector in the Kingdom by the establishment of National Waste Management Center and Saudi Investment Recycling Company (SIRC).
- National Waste Management Center aims to govern, regulate and monitor the waste management sector in the Kingdom and integrates the needed infrastructure along with offering incentives to attract investments to the sector.
- The Saudi Investment Recycling Company (SIRC) is a Public Investment Fund company established to develop, own, operate and finance various activities across all waste types in the Kingdom of Saudi Arabia. Through its achievements, SIRC will help meet and exceed the objectives of the new economic reforms and support the success of various initiatives identified by the revised National Regulatory Framework.
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