CEO’s Message
SEC remains a top player in the electric energy sector in the Middle East and North Africa, leading in production, transmission, and distribution. It prioritizes sustainable development by enhancing the quality and reliability of electrical services for customers through technical expertise
The Saudi Electricity Company continues to lead the field of electrical energy as the largest producer, transmitter, and distributor of electrical energy in the Middle East and North Africa. The company strengthens its pivotal role in sustainable development by harnessing its technological and operational capacities to enhance the quality and reliability of electricity services provided to customers.
Eng. Khaled bin Hamad Al-Gnoon
Chief Executive Officer
In line with the Kingdom’s Vision 2030, which focuses on achieving sustainability, securing energy supply, improving the efficiency of the electricity sector, and enhancing service reliability, the company undertook significant projects in 2023 to update electricity distribution networks and transmission lines with strategic investments until 2030. These significant projects aim to strengthen the electrical network, meet the needs of developmental, economic, and urban projects, and keep pace with the growing demand for electrical energy in the Kingdom.
The growing interest of the Government of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and Crown Prince, Chairman of the Council of Ministers, His Royal Highness Prince Mohammed bin Salman and the continuous supervision of His Royal Highness Prince Abdulaziz bin Salman, the Minister of Energy, compel us all at SEC to double our efforts and dedicate our work to continue the development momentum in the Kingdom across social, economic, and environmental sectors.
I am pleased to highlight below the notable achievements of the company’s sectors over the past twelve months:
Financial Performance
During the year 2023, Saudi Electricity Company achieved a revenue growth of 4.5% to 75,330 million SAR. This increase in revenue was driven by rising demand for electricity and continued growth in the customer base, as well as revenue growth from the transmission system due to increased customer loads and revenue growth from Dawiyat Telecom company, in addition to new revenues for the company from the development of projects to construct substations and transmission lines for its clients. Total assets amounted to 500.8 billion SAR compared to 479.5 billion SAR, representing a growth rate of 4.4%, while equity amounted to 256.3 billion SAR. Thanks to the company’s strong financial position and sustainable capital structure, it was able to finance its growth plans. Throughout 2023, the company successfully completed several high-profile financing transactions in financial markets, totaling 34.1 billion SAR (equivalent to 9.1 billion US dollars) through various financing instruments. These include Green Sukuk related to environmental, social, and governance practices, Local and International Syndications, or export credit agencies, supporting continued investment in the company’s future growth.
Financial Sustainability and Investment Sector
In early 2023, the company developed annual plans and targets to achieve financial revenue from the company’s investments, aimed at implementing effective and sustainable solutions, along with launching an initiative to improve operational budget efficiency, ensuring efficient use of resources and compliance with approved budgets.
Based on this, SEC, sought to maximize revenues of other investments, which would enhance the company’s financial sustainability through the development of new investment opportunities, or to maximize its current investments through the management of subsidiaries’ portfolios. This is done by evaluating the performance of the company’s subsidiaries, and managing investment projects in the industrial and digital sectors. Some of notable achievements of the Investments Sector are as follows:
- Acquisition of a 25% stake in the “Electric Vehicle Infrastructure Company” from the sole owner, the Public Investment Fund.
- A consortium of SEC and ACWA Power won the projects of Taiba 1 and Qassim 1 power plants, with a total capacity of 3.6 gigawatts and an estimated cost of SAR 14.6 billion.
- The Saudi Electricity Company (SEC) received the approval of Saudi Power Procurement Company (Principal Buyer), the off-taker, to start implementing the expansion project of the Rabigh power plant by adding combined-cycle units with a capacity of 1.2 gigawatts.
Digital Transformation and Innovation
The digital and technological transformation represents one of the most important factors that contributes to the SEC’s strategy to be a leader in the field of digital electricity in the region. The digital transformation journey includes all aspects of our work, with the aim of achieving the highest levels of asset reliability, building a reliable digital brand that offers new products and experiences, and leveraging digital investments as a source of growth, with close monitoring of the steady increase in the digital maturity index. However, the most important thing is to enable the local use of technology and create job opportunities targeting the youth of the country. Artificial intelligence and deep learning capabilities contribute to generating accurate predictions of energy demand, improving customer experience, enhancing health, safety, security, and the environment.
In the initial launch phase in 2023, SEC implemented over 400 diverse technical solutions and automated more than 500 processes across the company, including advanced and accurate solutions that rely on modern automation techniques and emerging technologies to achieve internal development and significantly improve customer experience.
The research, development, and innovation strategy were formulated with the active participation of all relevant scientific activities and committees. The objective is to establish a framework that aligns with national priorities in the research, development, and innovation sector to achieve the company’s future objectives in this domain. One of the company’s notable achievements is securing three patents, with an additional ten patent applications registered with the Saudi Authority for Intellectual Property under the name of the Saudi Electricity Company. This underscores the company’s strong commitment to innovation in the field of electric power and its capability to develop cutting-edge technologies aimed at enhancing electrical operations in efficient and sustainable ways.
Power Generation
Electricity generation is a core business contributing to the stability and reliability of the electrical system. The company operates 476 power generation units in 38 power plants across the Kingdom, with capacities ranging from small 15 megawatts to modern large 700 megawatts units. By the end of 2023, these units, with different technologies, will have a total capacity exceeding 55,000 megawatts, representing 66% of the Kingdom’s total production capacity, making the Saudi Electricity Company the largest electricity producer in the Middle East and North Africa. The electricity produced from the company’s plants reached 218.9 terawatt-hours in 2023, constituting over 57% of the Kingdom’s total electricity production. Approximately 368 million barrels of oil equivalent were consumed, with a production efficiency exceeding 37.7%.
Electricity Transmission
In the field of electricity transmission, SEC ensures the high reliability and stability of electricity transfer to load centers across the Kingdom. The company focuses on expanding and reinforcing the electricity transmission network to substations. The company completed several projects under the National Grid SA, including:
- Transmission transformers capacity reached 1,234 in 2023.
- The completed station capacity reached 488,073 MVA.
- The length of transmission networks reached 95,563 C-Km.
- The number of transmission transformers was 3,940.
Distribution and Customer Services
performance excellence, a restructuring of activities has been implemented, involving control, losses and creating a new structure. Settlement and accounting operations have been centralized at the kingdom level. Additionally, there has been a shift in the approach and model of distribution operations through the establishment of organizational units (divisions and departments for receiving distribution assets) across all electricity departments. This is to ensure the quality of project reception and distribution assets.
We continue advancing our efforts to modernize site addresses through the Geographic Information System (GIS), by launching the Digital Transformation Initiative and elevating data quality in the GIS. Over 10.8 million meters have been updated and linked to billing systems. Additionally, 104,000 transformers, 196 primary stations, and 75,000 network devices have been updated.
These efforts have significantly contributed to the notable improvement in performance indicators measuring service quality over the past year:
- Improved System Average Interruption Duration Index (SAIDI) by approximately 7%.
- Enhanced System Average Interruption Frequency Index (SAIFI) by approximately 11%.
- Reduced average time to Supply connections for new
- customers by 27%, reaching only 3.31 working days compared to 4.5 working days.
- Increased automation ratio in the distribution network to 24.49%, from 16.2% by the end of 2022.
The distribution and customer services business line continues to work intensively to achieve customer satisfaction and enhance confidence in the electrical services provided to them. This is accomplished through launching a series of initiatives and projects, forming highly qualified specialized teams to face challenges and overcome difficulties.
The distribution business line also leverages all available modern technologies for digital transformation and provides services through multiple communication channels, enabling customers to benefit from the company’s services in a simple, easy, and fast way. The customer satisfaction with the services provided has exceeded 81%.
The company has launched a new version of Al Kahraba Application and website, aiming to enhance the overall customer experience in having electricity services with greater ease and efficiency. The app includes several features, such as a simplified and easy-to-read display of invoices, a 24/7 live chat service, a virtual office service, where customers can communicate with a customer service representative via audio and video to complete the required service without having to visit the office, the provision of the most important services that can be easily requested through the app and website, and easy bill payment through Apple Pay and credit cards.
Furthermore, the company has implemented Voice of Customer (VoC), sending automated surveys after service execution. This feedback is recorded in a unified system, enabling analysis and collaborative improvement planning across all relevant sectors.
Meanwhile, the developments during the past period included each of rephrasing communication messages with customers, significant improvements to automated response systems at call centers, mapping service office locations via Google Maps, internal system enhancements that have a positive impact on customer service, and various other general improvements.
Service to the two Holy Mosques and Holy Sites
The service of the Two Holy Mosques and the Holy Sites is at the top of our priorities every year. It is one of the most important priorities that we strive to ensure the stability of the system and provide services with high reliability around the clock. Our efforts in serving the visitors of the Two Holy Mosques this year were reflected in the success of the Hajj season of 1444 H, thanks to the support of the wise leadership and the efforts of the company’s employees in the field and behind the monitoring and control screens. All distribution stations in the Holy Sites have been automated and replaced with smart stations to enhance the security and reliability of the networks, improve the efficiency and quality of electrical service, and control and monitor the network remotely. We are also proud that no significant interruption was recorded in the Holy Sites, the Umrah accommodation area, and the Masjid Al Haram during the Hajj season of 1444 H, despite recording maximum electrical loads during the Hajj season of 1444 H.
Occupational Health, Safety, Security, and Environment
The Saudi Electricity Company is committed to making the culture of health, safety, security, and environment (HSSE) a top priority in all its operations. As part of its ongoing efforts to promote these values, the company has implemented effective measures that focus on improving standards to ensure the well-being of its employees and stakeholders. The company has also taken strategic initiatives, such as investing heavily in digital transformation and specifically in strengthening the security of the operations system, with the aim of enhancing readiness and developing the skills of its employees. This contributes to improving the overall performance of the electricity system and ensuring the delivery of safe and reliable services.
Sustainability
The Saudi Electricity Company’s strategy embodies our dedication to achieving the Kingdom’s Vision 2030 and the United Nations Sustainable Development Goals (SDGs). We emphasize our strong commitment to promoting energy efficiency, ensuring sustainable electricity supply, supporting energy transition, and preserving natural resources. We also focus on promoting economic diversification and community development, with an emphasis on applying transparency principles in all our practices.
In line with the Kingdom’s goal of achieving net-zero emissions by 2060, We have announced the company’s ambition to reach net-zero emissions by 2050 and launched ambitious projects to reduce carbon emissions. We are proud of the significant progress made in integrating environmental, social, and governance (ESG) activities across all our business areas during the past year, which was marked by the launch and successful implementation of the “ESG Strategy” in 2023.
Affirming our commitment to sustainability, this year we made notable progress on sustainability by partnering with WAVE to protect biodiversity, purchasing carbon credits to offset emissions, and issuing dual tranche sukuk with a green tranche to finance its projects through sustainable finance. Moreover, we signed eight Memoranda of Understanding (MoUs) with leading local and international entities in 2023, coinciding with the COP28 Climate Summit. We believe in the importance of cooperation and partnerships in achieving carbon emission reduction goals.
Our achievements and efforts in the field of ESG have been recognized by the authorities concerned, resulting in improved ratings in this area. Our S&P Global ESG score increased from 32 in 2022 to 35 in 2023, while our ESG risk rating on the Sustainalytics index decreased from 44.5 to 36.
Renewable Energy
In implementation of King Salman’s Renewable Energy Initiative, and to achieve a sustainable increase in the share of renewable energy from the total energy sources in the Kingdom, the Saudi Electricity Company has dedicated substantial efforts to enable renewable energy sources in the Kingdom by providing the appropriate solutions to transfer this energy to load centers with high reliability. We have also developed our capabilities through training, knowledge transfer, and the use of advanced technological solutions in the management and operation of renewable energy sources, in a way that ensures the optimal and safe operation of the electrical system.
Workforce
The Saudi Electricity Company prioritizes attracting highly skilled talents and experiences to work in an attractive, motivating work environment conducive to performance. We aim to enhance employee loyalty and integration to enable the company and its subsidiaries to efficiently achieve their plans, goals, success, and business sustainability.
The company has developed and implemented a long-term human resources strategy aligned with the company’s ambitious aspirations, involving establishing an effective organizational model supported by competitive policies based on best practices and a performance management mechanism.
In this context, we continue our efforts to empower working women, with a 21.6% increase in female employees compared to 2022, and a 88.9% increase in female leadership positions.
Localization and Local Content
In the field of Localization and Local Content, the company has adopted the initiatives of the localization and content program “Bina’”, and has developed localization plans that contribute to the company’s targets. The company has also started to implement a number of enablers according to the new local content regulations to support the local industry and small and medium sized enterprises, with notable achievements in 2023 including:
- Purchases from local factories exceeding SAR 53 billion in the period from 2019 to 2023, with a localization rate exceeding 70%.
- Strengthening the digital transformation through the Bina platform to automate the processes of reviewing local content plans in the contracting phase and following up on the commitment of contractors and suppliers after the contracting phase.
- Launching the Bina calculator to automatically calculate the ranking of bidders in the financial evaluation, and completing the issuance of the interactive dashboard of the Bina program to track the contribution of local content in contracts on a daily basis, with the aim of increasing efficiency, accuracy of data, and reducing the time required to complete these works.
- Activating the localization initiative by leveraging purchasing power through the signing of two contracts to localize the production of gas switches for high and ultra-high voltages with binding purchase agreements worth more than 5.9 billion SAR, with the condition of building local factories or increasing current local capacity within a maximum of two years.
Future Plans
We reaffirm our full commitment to continuous change and development aligned with the Kingdom’s Vision 2030, enhancing investment opportunities to improve electrical energy efficiency in the Kingdom. We have set forth an ambitious vision and strategy for digital transformation primarily based on the latest digital transformation and artificial intelligence technologies. In an ambitious plan extending to 2025, aiming to enhance transparency, improve customer service, and serve the company’s ambitious goals and the Kingdom’s adopted vision for 2030.
The company is committed to developing a strong and sustainable energy system, with a strong focus on large-scale investments in renewable energy. The company aims to connect all renewable energy produced in the Kingdom, which is about 50% of the total electricity production capacity, while directing its efforts towards meeting the growing demand by expanding its network and strengthening its main stations.
As part of its commitment to sustainability, the company is implementing the liquid fuel conversion project, where power plants are converted from fuel to gas. This strategic direction is part of the company’s efforts to achieve its goals of reducing carbon emissions. This action is also in line with its commitment to achieving carbon neutrality, which aims to provide a more sustainable and efficient environment.
In conclusion, these achievements would not have been possible without the guidance and limitless support from our wise leadership under the Custodian of the Two Holy Mosques King Salman bin Abdulaziz and His Royal Highness Crown Prince Mohammed bin Salman, and the supervision and follow-up from His Royal Highness Minister of Energy Prince Abdulaziz bin Salman. They have provided all the means and opportunities to realize the aspirations of the leadership, opening new horizons for expansion and prosperity in the electrical energy sector in the Kingdom.