Riyadh – Mubasher: The restructuring of the Saudi power generation sector in line with the recent price adjustments could yield more than SAR 15 billion a year, a new report by the King Abdullah Petroleum Studies and Research Center (KAPSARC) has shown.
The study entitled “Restructuring Saudi Arabia’s Power Generation Sector: Model-Based Insights” developed a model in a bid to incentivise the introduction of private generation firms in the power sector along with overhauling fuel prices to an energy equivalent of $3 per million British thermal units (mmBtu).
KAPSARC’s study forecast that the country’s surplus would come from the savings carried out as part of the fuel subsidy.
“Under sufficient competition, the fuel subsidy savings exceed the loss in the consumers’ economic surplus, which can support compensation schemes that mitigate the increase in electricity costs to consumers such as Citizen Account,” the report stated.
The Saudi body is carrying out researches into energy environment, technology, policy, and economics. It is also focusing on finding solutions to enhancing the use of energy and creating added-value for “both energy exporting and consuming societies.”
