Saudi Arabia Power Report Q4 2017

Saudi Arabia Power Report Q4 2017

BMI View: Gas-fired power's share of total electricity output in Saudi Arabia will increase over our 10-year forecast period as the government aims to reduce its reliance on oil-fired power. As the governmentfocuses on gas power investment and the lower oil-price environment decreases its overall budget, weexpect that non-hydropower renewable projects will receive less funding and the government's target of9.5GW of renewable capacity by 2023 will not be met.

Latest Trends And Developments:

We maintain our overall forecasts for thermal power generation in Saudi Arabia. We expect that oil-firedpower growth will remain mostly stagnant at an annual average growth rate of 0.2% over our 10-yearforecast period, while gas-fired power will grow at 3.8% during that same time. The stagnant growth ratein oil power will be due to the government focusing on increasing gas-fired power output in order to useless oil for electricity generation to free it up for export. Gas-fired power output will therefore increase itsdominance of the Saudi power sector, and we expect that the government will focus its investment on gasas a baseload power source while attempting to increase its non-hydropower renewables and nuclearcapacity at a later stage.