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5/11/2012

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Saudi Electricity Company
(SEC)
Restructuring Project
N ti l G id

Restructuring Project
National Grid SA
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Restructuring Targets
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Contents
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4
SEC&TheSubsidiaries OrganizationStructures
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NationalGridSA OrganizationStructures
Restructuring Impact on SEC External Stakeholders
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Future Steps
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Restructuring
Targets
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unbundling a monopoly is a pre-requisite for market
liberalization, which in turn provides long-term benefits
such as:
Competitive market which improve productivity, operation
RestructuringTargets
efficiency and quality of service.
Attract investment, that will contribute to satisfy the
requirements of the large growth rates in electricity demand
It is very important to keep and maintain
power system stability, so restructuring will
be implemented gradually such that there be implemented gradually, such that there
would be no impact on services provided
by SEC
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In year 2000, SEC consolidated all electricity companies (10 Companies
and 11 Electricity Projects) in one company named the Saudi Electricity
Company (SEC).
A new organization structure was developed based on business
Preparation for Electricity market
functions (Generation, Transmission and Distribution).
All employees of the merged enteritis were placed in the new
organization structure.
Financial separation of the business of generation, transmission and
distribution
Procedures unification, best practice implementation and improvements
programs.
Integration of automated systems and move to the comprehensive
Enterprise Resource Planning (ERP) system
Strengthening the capacity of generation , transmission and distribution
networks
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Restructuring of SEC Generation,
Transmission & Distributions Businesses to
the following subsidiaries:
SECBoardDecision
National
Grid SA
DISTCO
All subsidiaries are limited liability
Companies and fully owned by SEC
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GENCOs
Companies and fully owned by SEC
No impact or change on shares or shareholders due to
restructuring.
A consolidated financial statement will be published by SEC
incorporating Subsidiary Companies financial results.
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SEC initiated the unbundling process by establishing 6 subsidiaries
within a Single Buyer market structure
Expected Unbundling Stages of SEC
Before
1/1/2012
Transition Stage Medium-Term Stage Long-term Stage
SEC
(vertically
integrated)
SEC Holding
National
Grid SA
Distrco
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Gencos
100% 100% 100%
Further
Unbundling &
Restructuring
1/1/2012
Ownership
Separation of
Transmission or
Generation
Companies from
Holdco
Single Buyer Market
Principal Buyer Market with
Wholesale Market Competition
Open market
with retail
competition and
market
exchange
Focus
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Accordingly, new contractual interfaces and financial flows will need to be
put in place
Contractual Interfaces and Key Financial Flows
Contractual Agreement
Financial Flow
Customers
End-user
Tariffs
Sales
Agreement
Transmission
Company
Distribution Company
Genco A
Genco A
Genco A
Generation Company
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Power Purchase Lease Lease
Energy &
Lease Lease Collected Service Service Service
SEC (Holding) Company
Power Purchase
Agreements
Lease
Revenue
Lease
Revenue
Capacity
Revenue
Lease
Agreement
Lease
Agreement
Collected
Revenue
Service
Level
Agreement
Service
Level
Agreement
Service
Level
Agreement
Note: Service charges related to SLAs are not shown to simplify figure
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In summary, the new organization model is based on the
following allocation of responsibilities
Holding Company
Prepares and approves system planning (including generation
expansion plan) and budgets
Performs long-term fuel planning and administers fuel supply
agreements
Provides financing
Develops new power plants tenders IPPs and administers their
Owns, operates and maintains
Develops new power plants, tenders IPPs and administers their
contracts
Develops EHV transmission system and interconnections
Acts as the single buyer of electricity and leases transmission
and distribution capacity
Provides shared services to subsidiaries
Monitors the performance of subsidiaries
Liaises with ECRA for all regulatory matters
Distribution Company
Owns, operates and maintains
the distribution network
Transmission Company
1. Ownership, operation and
maintenance of transmission networks.
2. Operation and control of the
Generation Company A
, p
power plants
Plans and executes
enhancements, rehabilitations,
replacements and extension
projects
Issues substation demand
forecast (sales and
consumption)
Performs distribution network
planning and executes projects
Manages customer services,
billing and collection
Manages small isolated
generators
2. Operation and control of the
electrical system.
3. Monitor network performance, and
economical operation of power plants.
4. Preparation requirements of
transmission networks.
5. Design and implementation of
transmission projects (high voltage).
6. Submit periodic reports on the
performance of the transmission
company to the Holding Company.
7. Issuing budgets quarterly, and
annual.
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SEC&TheSubsidiaries
OrganizationStructures
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SECOrganizationStructure
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TheOptimizedGroupingisamajorshiftfromthecurrent
geographicdistribution
Gencos Power Plants Location
(During Period 2014 2021)
Al-Qurayyat
Ghazlan
Dammam
Qurayyah
Berri
Qaisuma
Faras
Arar
Rabigh
PP8
Hail
Al-Qasim
PP5
Shadgum
Al-J ouf
Madinah
Tabarjal
Rafha
Tabouk
Al-Wajh
PP12
Qurayyah CC
Rabigh New
Ras Abu Qamees
PP14
PP13 Al Rais
Ras Al Khair
Duba GT
PP9
Uthmaniyah
J uaymah
Safaniyah
Makkah
Rabigh
Shoaiba
J eddah
PP8
PP7
Najran
Tihama
Bisha
Asir
Taif
J izan GT
J uba
Shoqaiq
PP10
Sharourah
J eddah South
D C A B
Shoaiba CC
PP14
Baha
Layla
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CEO
RegulatoryAffairs
Boardof
Directors
OrganizationStructureforNationalGridSA
Operation
&Control
Grid
Maintenance
Projects Planning Engineering
Transmission
Finance
Technical
Services
Business
Coordination
BU
Division Department
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NationalGrid SA
Organization
Structures
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As of 1/1/2012
N t i l G i d SA Nat i onal Gr i d SA
I s Al i ve
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Finalization of National Grid SA Company
establishment procedures.
Appointment of Board of Directors members.
National Grid SA Go Live Steps
Appointment of CEO.
Finalization of Organization Structure approved by
Board of Directors.
Appointment of Executive Management.
Automated systems update. Automated systems update.
Transfer of Employees and other resources from
SEC to National Grid SA.
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Organizational Structure of the National Grid SA
approved Level I and II approved
Board of Directors
CEO
Regulatory Affairs
Operations
and Control
Grid
Maintenance
HV Projects Planning Engineering Technical
Services
Transmission
Finance
Business
Coordination
Operation &
Control COA
Operation &
Control - WOA
Grid
Maintenance
Sector -COA
Projects
Central
Projects
West
Projects
East
Network
Planning
Planning
Support
Engineering
Services
Engineering
& Design
Engineering
Protection
Telecom
Engineering
and SAS
Commissioning
Services
Asset Quality
Performance
Tele
Communications
Grid
Maintenance
Sector -WOA
Grid
Maintenance
Sector EOA
Operation &
Control - EOA
Operation &
SOA Grid
Maintenance
Planning &
Coordination
Projects
South
Projects
Support
Standard &
Specifications
Services
Research &
Development
BU Sector Dept. Section
Planning &
Coordination
Planning &
Coordination
Planning &
Coordination
Planning &
Coordination
Sector -EOA
Operation &
Control - SOA
National
Control
System
Operation
Planning
System
Control
Planning &
Coordination
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Dut i es & Responsi bi l i t i es of
Oper at i on & Cont r ol Busi ness Uni t
To operate & control power
transmission system kingdom
Wide in economical & secured
operation and safe condition operation and safe condition.
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Dut i es & Responsi bi l i t i es of
Oper at i on & Cont r ol Busi ness Uni t
AlJouf
T
Hail
T
Tabook T
Qaysumah
T
Qassim
T
T
Riyadh
NCC
Dammam
T
Jeddah
T
Jubbah
NC
C
C
E
S
W
T
Madinah
Yanbu
T
Najran
T
Abha
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Dut i es & Responsi bi l i t i es of
Gr i d Mai nt enanc e Regi onal
(COA, WOA, EOA & SOA)
To operate and maintain the Transmission
Network in the Region adopting cost
effective maintenance practices, optimum
maintenance scheduling per established
maintenance policies and procedures maintenance policies and procedures,
enhancing safety and life of the equipment.
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Dut i es & Responsi bi l i t i es of Gr i d Mai nt enanc e Regi onal
(COA, WOA, EOA & SOA)
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Fiber Optic Network
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Dut i es & Responsi bi l i t i es of
Pr oj ec t s Busi ness Uni t
To manage the projects execution fromawarding up to To manage the projects execution from awarding up to
close out stages for the HV ( 110 up to 132 ) system in
all regions (COA, WOA, EOA, SOA).
To Implement and approve project programs.
To Review, monitor and accept contractor construction
procedures .
To Manage relationships with contractors to maintain
an ongoing dialogue with regular feedback.
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Dut i es & Responsi bi l i t i es of
Pl anni ng Busi ness Uni t
Do the Network Planning and studies for the o t e et o a g a d studes o t e
HV system in all regions (COA, WOA, EOA,
SOA), Follow up, Monitor and document the
Load Forecast, secure Capital & Operating
Budget , Right of Ways for transmission
facilities keep and update the facilities , keep and update the
documentation and Geographical
Information Systems.
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To prepare and Provide the SOW,
Dut i es & Responsi bi l i t i es of
Engi neer i ng Busi ness Uni t
o p epa e a d o de t e SO ,
engineering & designs packages and
engineering support during the various
stages of projects of the HV
Transmission Network Systems including
Substations TransmissionLines Substations, Transmission Lines,
Protection and Telecommunications in all
regions (COA, WOA, EOA, SOA).
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Dut i es & Responsi bi l i t i es of
Tec hni c al Ser vi c es Busi ness Uni t
To undertake commissioning of the newly installed transmission
assets and ensure that they meet the Company Standards &
Specifications and are operating as designed ,
Act as interface between System Operation and Project
management in the energization of Transmission projects,
Monitor the Asset Performance and Service Quality
To conduct frequent audit on project design packages and factory
test reports to ensure that all Transmission Projects are properly
Design from all aspects and to conform that operation and g p p
maintenance and others positions & requirements are incorporated
To assure that all activities from project start-up until completion
are bound within the framework of the Quality system
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Growth Indicators 2004 - 2017
Years
Main Indicators Voltage Level Current Situation Future Growth
2004 2010 Growth
%
2017 Growth
% % %
Total Length of
O/H & U/G
Circuit KM
EHV
11743 18003 53 29520 151
HV
21941 28176 28 35670 63
Substation
Numbers
EHV
66 93 41 166 152
HV
450 549 22 853 90
Transformer
Numbers
EHV
248 309 25 744 200
HV
1187 1536 29 2403 102
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Restructuring Impact
on SEC External
Stakeholders
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In the next stage, work will remain according to
Restructuring impact on External Stakeholders
existing policies and procedures and No
changes will happen in dealing with all
categories of consumers, contractors, suppliers g
and Banks.
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Future Steps
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SEC is now performing the activities
required for the unbundling of the four
GENCOS d DISTCO d i 2013
Future Steps
GENCOS and DISTCO during 2013.
This situation will continue until the
realization of the prerequisites for the
transition to open market and
titi k t lib li ti competitive market liberalization.
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Through a study undertaken by SEC with a Consultant, it has
became clear that:
All countries who have liberalized their electricity market, have
had the basic requirements (which are currently not available).
Market Liberalization Requirements
The most important of which are:
1.The availability of balanced tariff that reflects the cost for every
category of consumers to ensure adequate revenue for the
Sector or a clear Governmental commitments to cover the
deficit .
2.Availability of an acceptable reserve margin (from 10% to 15%)
of generation capacity during peak time of generation capacity during peak time.
3.Availability of reliable and inter-connected transmission
system in Kingdom
4. A flexible and quick mechanism to modify tariff according to
the variables to encourage investment .
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Thank You
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