One important aspect of the electricity industry in Saudi Arabia that has not been

discussed in the preceding description of the CEM roadmap stages is the inclusion of
renewable and nuclear generation in the market arrangements. Due to the
uncertain timing of both the progression through the CEM implementation stages,
and the procurement of renewable and nuclear generation, it is not known which
stage the reforms will be at when these plants start to come online. Appropriate
arrangements will need to be in place sufficiently in advance in order to provide
information to potential investors.
In Stages 1 and 2, arrangements for renewable and nuclear generators could be as
follows:
On Feb 2013, K.A.CARE launched its Renewable Energy Competitive Procurement
Portal and released a White Paper entitled, Proposed Competitive Procurement
Process for the Renewable Energy Program (a document under
development)outlining how the procurement process will take place. 1
KACARE program of installing 54 MW renewable capacities by 2030 will be done
through a series of procurement rounds. The transition from competitive
procurement to Feed-in-Tariff (FIT) depends on appropriate price levels have
determined from competitive procurements or will proceed to 3 rd procurement
round to gain confidence for price discovery for FIT 2.
The target capacity of the KACARE shall be coordinated with the National Grid SA
or with ISO to incorporate the RE plans for the system planning process and
requirements for generation and transmission.
KACARE will be establishing the Sustainable Energy Procurement Company
(SEPC), a standalone government-backed entity will be responsible for
administering the procurement and executing and managing the PPAs. Power
purchase agreements will be paid for a period of 20 years and eligible projects
will be at least 5 MW in size.
The SEPC will coordinate with the single buyer for the sale of electricity
generated by RE or may also enter to bilateral contracts with large consumers at
principal buyer stage.
KACARE will establish Sustainable Energy Control Center (SECC) for efficient
balancing of the system and collaboration with the System Operator.
SECC is a dedicated control center for renewables in close coordination with
system operator will be essential for regular exchanges on expected renewable
generation, the availability of quick response units, the availability of redispatching of generation for congestion management, the curtailment potential
of renewable generation, and the availability of energy from storage.
Intermittent generation would generate as available, unless system security
considerations prevented this
1 http://kacare.gov.sa/en/wp-content/uploads/K.A.CARE-Proposed-CompetitiveProcurement-Process-for-the-Renewable-Energy-Program-2013.pdf
2 Role of Solar in KACARE Renewable Procurement Program, 4 th Saudi Solar Energy
Forum, May 2012

The intermittency of renewables poses threat in system reliability. As solar

installation grows, there is a threat of over-generation because peak output for solar
is generally hours before peak demand, therefore resources like gas-fired power
plants will have to work extra hard to meet demand. On the other hand, solar power
generation drops in the late afternoon but energy demand rises, the dramatic ramp
up in power generation is necessary. It is important to consider what measures
could be taken if large quantity of intermittent generation is expected to cause
issues with system reliability.
One measure to address the intermittency issues is improved forecasting, and
aggregation of intermittent plant, making intermittent output more predictable.
K.A.CARE shall consider this measure in connection with their plans for the
Sustainable Energy Control Centre (SECC), which will assist renewable generation in
making forecasts and coordinating with the ISO.
Another challenge in renewables especially with solar energy is reduced or curtailed
energy production when the sun sets or is blocked by clouds. Thermal energy
storage provides a workable solution to this challenge. Storage mechanism would
also make intermittent plant output more consistent and predictable, allowing the
profile across the day to be flattened3. This area is where the KACARE have moved
forward, the procurement requirement of KACARE during the Introductory Round,
the Concentrated Solar Power (CSP) will be required to provide a minimum of 4
hours of storage. In subsequent rounds, the minimum amount of storage required
may increase based on K.A.CAREs assessment of technical and economic feasibility.
Increasing renewable energy penetration to the grid is eminent with the target of
KACARE. More so that SEC has acknowledged the contribution of Self Renewable
Energy (RE) Power Producers in building additional capacities using RE resource in
meeting their own demand and reducing dependence on fossil fuel. These self RE
power producer will be allowed to import electricity from the grid in cases where the
RE generation could not meet its demand and could also offer surplus RE generation
for sale to SEC network. From the operations perspective on making the renewable
integration successful, it is necessary to support the National Grid of SA (TSO) in its
daily operations to reduce the negative impacts related to the variability and
uncertainty of this kind of power production through communication with the SECC.
Therefore, all renewables whether for own-use shall be coordinated with KACARE to
validate that all proposed renewable generation are consistent with the KACARE
targets and grid integration capacities. This own-use RE power producers shall
cooperate with SECC for generation forecasting to be provided by SECC to the TSO.

3 ECRA Preliminary Market Design Report, 19 August 2014