Developing Saudi Arabia’s Energy Infrastructure: Modern Power Plants, Grid Expansion, and Reliable Energy Supply

A government-owned power generation and transmission company in Saudi Arabia seeking to modernize the national energy infrastructure and meet growing electricity demand.

Power demand was growing, straining aging infrastructure. Many power plants were decades-old oil-fired units with low efficiency and poor reliability. The grid was nearing capacity in some areas, risking bottlenecks and outages. Integrating new power sources (e.g. upcoming solar farms and high-efficiency gas plants) required major grid upgrades. The client needed to modernize generation and expand the grid to ensure a stable power supply and reduce reliance on old oil-fired stations.

We formulated a comprehensive infrastructure development plan covering generation, transmission, and distribution improvements. On the generation side, the plan prioritized replacing outdated oil-fired power plants with high-efficiency combined-cycle gas turbines (CCGT). For example, we scheduled the phased retirement of several old oil power stations and their replacement with new gas-fired plants that produce more electricity with less fuel. This aligns with projects already underway, such as contracts to add 3.6 GW of new gas capacity to the grid. We also addressed capacity expansion by proposing additional power plants in fast-growing regions to stay ahead of demand. On the transmission side, the solution called for building new high-voltage transmission lines to connect renewable energy zones and remote areas to the grid, and upgrading existing lines to increase their capacity. We planned for new substations and reinforcements in areas experiencing heavy load growth. The plan also integrated smart grid technologies – installing advanced sensors, automation, and control systems to improve grid monitoring and enable quicker responses to faults. Importantly, the solution emphasized localization: leveraging local factories (for example, a turbine manufacturing hub in Dammam) to produce equipment and develop local expertise. Overall, the plan balanced immediate needs (preventing outages and adding capacity) with long-term sustainability (improving efficiency and reducing emissions by moving away from crude oil burning).

We used a data-driven approach combining engineering analysis and strategic planning. First, we conducted a load forecast to project electricity demand growth by region and by time of day for the next 15 years, taking into account population growth, new cities, and industrial projects. We then performed an asset assessment of all existing power plants and grid elements, identifying which units were underperforming or near end-of-life. Using this information, we prioritized which power plants to upgrade or replace first (for example, retiring units that had the highest fuel consumption per MWh). Our engineers worked with the client’s team to design technical specifications for the new gas plants and grid upgrades, incorporating state-of-the-art technology (like turbines capable of running on gas with future hydrogen blending potential). We also ran grid stability simulations to ensure the planned mix of generation and new transmission lines would maintain stable voltage and frequency under various scenarios. Financially, we created investment scenarios and explored financing options such as public funding, bonds, or public-private partnerships for certain projects. Throughout the approach, we coordinated with government stakeholders and regulators to align on timing (ensuring regulatory approval for plant retirements and new builds) and to smooth execution (like scheduling grid upgrades during off-peak seasons to minimize impact on consumers).

Our recommendations were phased and prioritized. Near term (next 3–5 years): Decommission about 5 GW of the oldest oil-fired plants and replace them with ~5.5 GW of new CCGT gas plants. This move would greatly improve generation efficiency and cut CO₂ emissions by up to 60% at those sites. Simultaneously, reinforce critical transmission corridors – for instance, build a new 380 kV line linking a major coastal city to inland demand centers to eliminate current bottlenecks. Mid term (5–10 years): Invest in additional combined-cycle plants and possibly introduce utility-scale renewable energy hybrid projects (gas + solar) to further diversify generation. Expand the national grid’s interconnectivity by adding east-west and north-south links, increasing the ability to transfer power nationwide. We also recommended deploying smart grid systems like an Advanced Distribution Management System (ADMS) and rolling out smart meters to all customers (a program already underway with 10 million smart meters) to improve demand management and transparency. Long term: Continue the shift to cleaner generation by exploring integration of new technologies (like hydrogen-fueled turbines or small modular nuclear reactors, as appropriate for Saudi Arabia’s context) to meet demand beyond 2030. Moreover, implement a robust maintenance and training program – we advised creating a center of excellence for power engineering to continuously train the workforce on maintaining complex new systems. Throughout all phases, ensure local content in projects (using local manufacturers for transformers, cables, etc.) to boost the domestic economy.

The implementation of the plan is already delivering tangible benefits. The first new combined-cycle gas plant has been commissioned, adding 3.6 GW to the national grid and supplying enough electricity for roughly 1.5 million homes. This plant replaced older oil-fired units, immediately improving efficiency and cutting emissions – CO₂ output at that site is dropping by up to 60% compared to the retired oil units. The grid upgrades are improving reliability: regions that previously experienced voltage drops or overloaded lines during peak hours have seen those issues alleviated after new lines and substations came online. The number of major outages has declined, and the utility reports that it can meet peak summer demand with a more comfortable reserve margin than before. Additionally, the emphasis on localization has had positive ripple effects – for example, the expansion of the turbine manufacturing hub in Dammam (supported by our plan) has created jobs and allowed a portion of the new plant components to be made domestically, aligning with Vision 2030’s industrial development goals. Overall, the client is now providing a more reliable and efficient power supply while burning less oil, thus saving costs and reducing environmental impact. The engagement has ensured that Saudi Arabia’s energy infrastructure is not only keeping up with current needs but is also prepared for future growth and cleaner energy integration.