KHOBAR: Saudi Electricity Co (SEC) has set Feb. 28 as a deadline for companies to bid for the gas-fired Al-Qurayyah power plant, a company executive said Saturday. Al-Qurayyah, south of the eastern city of Al-Khobar, would have a power generation capacity in the range of 1,800 to 2,100 megawatts, and is estimated to cost $1.8 billion, said Amer Al-Swaha, head of Independent Power Producer (IPP) projects. The plant is the third of six planned IPP projects, which involve the private sector, that would add around 11,000 megawatts of capacity. Saudi Electricity will buy all the power produced by the plant from the winning consortium, which will run it on a build-own-operate basis. “We have completed the pre-qualification process of 14 bidders and issued the request for proposals Wednesday,” Swaha said. “It (the project) is expected to be fully operational on June 1, 2014 ... Aug. 31, 2011 (is) the financial close,” Swaha said. The plant, Qurayyah IPP1 would use 300 million cubic feet per day of gas (cfd) to generate electricity. The plant had previously been expected to use heavy fuel oil as a feedstock. “We have a future plan for Qurayyah IPP2,” Swaha said, adding the company would expand the number of planned IPP projects to meet rising power needs. Demand for electricity in the Kingdom is rising at an annual rate of 8 percent and is expected to triple to 121,000 MW by 2032. SEC plans to invest $80 billion to boost capacity to at least 70,000 MW by 2020 from an installed capacity of 50,000 MW now. The private sector is contributing to adding capacity through IPPs. It is spending $24 billion, or around 30 percent of Saudi Electricity's spending program. SC reported earlier that its third-quarter profit advanced 34 percent on higher tariffs. Net income increased to SR2.3 billion ($610 million) from SR1.73 billion a year earlier. Third-quarter operating profit climbed 34 percent to SR2.18 billion. The tariffs were forecast to generate more than SR3 billion in annual revenue, the official Saudi Press Agency said in June. Profit rose on revenue from “increased quantities of energy sold at higher rates as well as the modification of the tariff categories,” the company said. Saudi Arabia may raise electricity tariffs further as it seeks to improve energy efficiency, the industry regulator said last month. The Saudi Electricity and Co-generation Regulatory Authority will seek higher fees for first-time connectivity and capacity usage, Abdullah Al-Shehri, the body's governor said. Saudi Arabia wants private companies to contribute to the Kingdom's SR300 billion power-capacity expansion plan to help cut subsidy costs. The government spends about SR50 billion a year to subsidize fuel needed for power production, Al-Shehri said.
