Possible Privatization Schemes for Power Generation Sector in Saudi Arabia

The fact that electrical energy is not a public service, but a commercial commodity that can be traded in a competitive market is very crucial towards the process of deregulating the market. The restructuring of the generation plants will assist in creating a perfect and fair competition between different companies and thus boosting the economy of the country by attracting new investors. The energy sector in Saudi Arabia is currently on the verge of a pivotal alterations and reforms in regulatory and investment policies. The kingdom is planning to shift the electricity market from a total monopoly where the generation, transmission and distribution sectors are almost owned by one entity to a more deregulated market especially on the generation side. This paper will provide a novel method to assess Saudi Arabia in evaluating the pricing structure of the existing power plants. Real data from the current installed plants will be used, ensuring more pricing accuracy. The paucity of research in the field and the reliance on forecast data of contemporary literature would enhance the value of the outcome of this article and ultimately help Saudi Arabia and other developing countries to successfully embark on the new phase of the electric grid.