Towards Sustainability of the power sector

1. نحو استدامة قطاع الطاقة الكهربائية Towards Sustainability of the power sector

2. Critical Value of SEC to the Kingdom Power Sustainability to the Sacred Cites Contributing to the Real Image of Saudi Arabia

3. SEC Contribution to KSA Economical Growth KSA will maintain its vital role as global supplier of secure oil and G20 member

4. What is SEC to The Kingdom & The World Supports Kingdom Commerce & Industry including sustainable Export of Hydrocarbon and Petrochems to the world. The largest utility in the MENA region and one of the largest globally Direct economic driver to KSA, to maintain its position as one of the largest 20 global economies In reality, SEC is the battery of global economy !!

5. WHAT SEC MEANS TO THE KINGDOM AND THE WORLD • Strategic • Savings towards 1.5 MBOE/D • Introduce smart grid and smart meters • Interconnection regionally & globally • Kingdom Pride: • SEC is the largest in the MENA Region and world • Installed capacity 62 GW • 56,000 km of Transmission (circle the globe) • 500,000 km of distribution lines EUROPE INTERCONNECTION EGYPT INTERCONNECTION GCC INTERCONNECTION • Citizens of the Kingdom • 7.3 million Customers • Upto 500,000 New Customers per year • SEC has Electrified 99% of rural areas • 13,000 Villages • Growing at the fastest pace in the world, 8% growth • 33,000 SEC direct Employees

6. THE ENERGY VALUE CHAIN FROM WELL HEAD TO CUSTOMER SEC is a major component in the energy value chain – producing the much needed electricity to move the economy forward and for the production of water

7. Countries identified for benchmarking Selection criteria USA China Norway Brazil Malaysia Singapore Spain Russia Venezuela UK Iran Canada S Korea 1 Overall fit for benchmark Country deep dive • Comprehensive Strategy • Strong governance • Success stories • Challenges faced Similar structure Large resources 1 USA China Norway Demand outpacing supply 2 Brazil Malaysia Development level 3 Pockets of excellence 2 Geography & culture 4 1 Germany N Zealand Geopolitical weight • Germany: Efficiency • NZ: Renewable • Japan: R&D structure • France: Leadership • UK: Integrated services • Iran: Fuel Subsidies • Korea: Localization • Norway: Governance 5 2 Similar objectives Competitive NOC 3 Japan France 6 4 Increase efficiency 7 5 UK Iran 6 Diversify fuel mix 8 7 Korea Norway Grow non oil & gas sectors 8 9 3 Examples of failed strategic attempts Build expertise 10 Impact on environment 11 Indonesia Mexico Nigeria Source Aramco

8. ANIMATE

9. What are we solving for ?? • Meeting Demand • Diversity of supply • Security of supply • Reducing hydrocarbon burning • Environmental Compliance • Maximize revenue • Increasing the standard to living • Optimizing the cost of energy • Leadership in the Kingdom and the world SEC IS SOLVING FOR ALL FO THE ABOVE !!!!!!

10. No yes Is this challenge?or

11. SEC RESPONSE TO ADDRESS THE OPPORTUNITY THROUGH THE STRATEGIC TRANSFORMATION PROGRAM (STP) ANIMaTE !!

12. ANIMaTE !!

13. IMPACT OF STP / OUTCOME / Our response – linking it all together • Generation (meet demand ) • Transmission • 600,000 efficiency • Expansion to meet demand • 4000 MW per year • 300,000 renewable • 54 KM • Increase capacity from 105 GVA in year 2000 to 203 GVA in year 2013. • Interconnection Local and international • Distribution • 146 km for overhead lines and 92 km for underground cables • Increase capacity from 93GVA in year 2000 to 189 GVA in year 2013.

14. The cost of doing nothing: Future investments required over a period of 20 years 2 MMBDOE increase by 2030 $30 Billion 3X 0.5 MMBD Refineries $50 Billion 5X300 MBD Crude Oil Facilities $6 Billion Distribution System $165B in capex $110B in operating cost $46 Billion 3X1 BSCFD Sales Gas $ 35 Billion 2 GW X10 Power Plants $7B in carbon credits Total ~$300 B • Saudi Aramco’s incremental costs: • CapEx of $131B • OpEx of $88B • Utilities incremental costs: • CapEx of $34B • OpEx of $22B Source Aramco

15. SEC Quick Facts Availability of power to serve 7.3 m customers is 99.9% SEC has one the lowest residential tariff globally The installed capacity in Kingdome is 62GW while total GCC capacity is 61 GW UAE Tariff subsidy serves only 20 % of total population(UAE citizen only ) while in Saudi 100 % SEC Saudization is 87% Sec is one of the largest 5 publicity trade companies in Kingdome stock market Annual growth in demand reach 8% Total Asset Value SAR 307 billion Telecom Example SEC customer base split by consumption: residential (50%), industrial (17.4%), commercial (16.3%), governmental (12.6%), and other (3.6%)

16. SEC to the world and kingdom

18. STAKEHOLDERS – WAY FORWARD WE STILL HAVE CHALLENGES WE WILL WORK WITH ALL OUR STAKEHOLDERS ….. 2.8 % of Fiscal Budget -

19. END

20. TO create success the entire supply chain and SEC’s position within the entire value --- • The supply chain • Include Value Chain Pic / Supply / Demand

21. SEC is proud to Provide the Kingdom with the need Power to drive prosperity and development for the economy, the society and the Kingdom as a whole, for : Export of hydro carbon to the world Keeping the lights on, water flowing and economy growing, Providing power for schools, universities, hospitals, commercial centers, critical facilities, government, military etc..