Riyadh – Mubasher: Saudi Arabia is currently in dire need of implementing reforms in the power sector to fix the imbalance in demand, the Arab Petroleum Investments Corporation (APICORP) said in a recent report.

The Kingdom’s power sector is one of the most important industries that will contribute to carrying out privatisation in the country.

The GCC nation’s demand for electricity increased 6.6% annually since 2006, the report added.

Over the previous period, the Saudi government has invested in installed capacity to raise it to 82 gigawatts (GW) from 60 GW in2010, which impacted negatively on the country’s energy budget.

“The government previously announced that it would break the Saudi Electricity Company (SEC) up into four power-generating companies, one transmission and one distribution company,” the report noted.

The SEC’s reform plan will focus on allocating its power-generating assets to four firms, through allowing domestic and overseas investors to pump investments in it.

Saudi Arabia is seeking investments range between $30 billion to $50 billion over the next five years in an effort to help accomplish its target of generating 9.5 GW from solar and wind sources, the report found.

To this end, the oil-rich nation, which is at pains to reduce its dependence on crude revenues, has recently awarded the first utility-scale solar project to ACWA Power.

“On the supply side, a market structure reform with the breakup of SEC is imminent while on the demand side, the government will try to tackle rising demand by liberalising electricity prices and introducing efficiency measures,” senior economist at APICORP Mustafa Ansari said.