FY2018 Study on Business Opportunity of High-Quality Energy Infrastructure to Overseas
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FY2018 Study on Business Opportunity of High-quality Energy Infrastructure to Overseas Feasibility Study for the Introduction of Electricity Energy Supplying Infrastructure for Off-Grid Facilities with Solar Power Generation and Hybrid Control in the Kingdom of Saudi Arabia Final Report March 2019 Ministry of Economy, Trade and Industry of Japan Oriental Consultants Global Co., Ltd. Marubeni Metals Corporation Preface We, Oriental Consultants Global Co., Ltd. and Marubeni Metals Corporation were given in trust by the Ministry of Economy, Trade, and Industy of Japan (METI) and conducted the Feasibility Study (“F/S”) in the Fiscal Year 2018 for “The Introduction of Energy Supplying Infrastructure for Off-Grid Facilities with Solar Power Generation and Hybrid Control in the Kingdom of Saudi Arabia” project in the Kingdom of Saudi Arabia. We summarized the result of the F/S in this report. The F/S, “Feasibility Study for the Introduction of Electricity Energy Supplying Infrastructure for Off-Grid Facilities with Solar Power Generation and Hybrid Control in the Kingdom of Saudi Arabia” aimed to build an infrastructure project which can fully utilize Japanese advanced technique and know-how by developing the “energy” field ― which is estimated to grow in the Kingdom of Saudi Arabia ― based on Japanese Government’s policy “Infrastrucrure System Strategy”, and by differentiate by creation of new business model. We hope this report will help to realize such projects, and will provide useful information to Japanese stakeholders. March 2019 Oriental Consultants Global Co., Ltd. Marubeni Metals Corporation Abbreviation Abbreviation Official Name AI Artificial Intelligence B/C Buyer’s Credit B/L Bank Loan CDM Clean Development Mechanism CO2 Carbon Dioxide DEWA Dubai Electricity and Water Authority DG Diesel Generator DNA Clean Development Mechanism Designated National Authority (Under Ministry of Energy, Indsutry, & Mineral Resources) ECRA Electricity and Cogeneration Regulatory Authority EIA Environment Impact Assessment EMS Energy Management System EPC Engineering, Procurement and Construction F/S Feasibility Study GAMEP The General Authority of Meteorology and Environmental Protection GCC Gulf Cooperation Council GCF Green Climate Fund GDP Gross Domestic Product GE General Electric GEC Global Environment Centre Foundation GHG Green House Gases GTM Greentech Media HCIS High Commission for Industrial Security IEEJ The Institute of Electrical Engineers of Japan IPP Independent Power Producer IRR Internal Rate of Return ISO International Organization for Standardization IUCN International Union for Conservation of Nature and Natural Resources JBIC Japan Bank for International Cooperation JCM Joint Crediting Mechanism JICA Japan International Cooperation Agency JV Joint Venture K.A.CARE King Abdullah City for Atomic and Renewable Energy MCI Ministry of Commerce and Investment MEIM Ministry of Energy, Industry and Mineral Resources MEWA Ministry of Environment, Water & Agriculture MJ Mega Joule MoE Ministry of Education NDC Nationally Determined Contribution NEDO New Energy and Industrial Technology Development Organization NIDLP National Industrial Development and Logistics Programme NREP National Renewable Energy Program Abbreviation Official Name NTP2020 National Transformation Program 2020 ODA Official Development Assistance OECD Organization for Economic Co-operation and Development OPEC Organization of the Petroleum Exporting Countries PCS Power Conversion System/Primary Cut out Switch PIF Public Investment Fund PR Public Relations PV Photovoltaic RC Responsible Care REN21 Renewable Energy Policy Network for the 21st Century REPDO Renewable Energy Project Developent Office RFP Request for Proposals ROM dump Run of Mine dump station station SAGIA Saudi Arabian General Investment Authority SAR Saudi Arabia Riyal SEC Saudi Electricity Company SIDF Saudi Industrial Development Fund SPC Special Purpose Company UAE United Arab Emirates USD United States Dollar Contents Chapter 1. Outline of Target Country and Related Sectors ........................................................... 11 1.1. Economy, Financial Status in the Target Country ............................................................... 11 1.1.1. Economy ..................................................................................................................... 11 1.1.2. Industrial Structure ...................................................................................................... 12 1.1.3. Population ................................................................................................................... 13 1.1.4. Investment from Overseas .......................................................................................... 14 1.2. Outline of Object Sectors of the Project ............................................................................. 15 1.2.1. Power Sector ............................................................................................................... 15 1.2.2. Mining Sector .............................................................................................................. 16 1.2.3. Cement Sector ............................................................................................................. 17 1.3. Trends in Policies ................................................................................................................ 18 1.3.1. Saudi Vision 2030 ....................................................................................................... 18 1.4. Outline of Project Area ....................................................................................................... 20 Chapter 2. Survey Method ............................................................................................................ 21 2.1. Surey Contents .................................................................................................................... 21 2.2. Survey Method and Organization ....................................................................................... 23 2.3. Survey Schedule ................................................................................................................. 24 Chapter 3. Contents of the Project and Examination of Technical Aspects .................................. 28 3.1. Background and Necessity of the Project ........................................................................... 28 3.1.1. Renewable Energy Trends in the World ...................................................................... 28 3.1.2. Renewable Energy Trends in the Middle East ............................................................ 29 3.1.3. Integrity of Renewable Energy Trends and Government Policy in Saudi Arabia ....... 30 3.2. Selection of Project Site and Examination for Implementation .......................................... 30 3.2.1. The Mine of the affiliated company of company A .................................................... 30 3.2.2. The Cement Factory of the company B ...................................................................... 31 3.2.3. Examination of Project Model .................................................................................... 31 3.2.4. Examination of Legislative System Related to the Project ......................................... 32 3.2.5. Examination of Project Implementation in the Potential Sites.................................... 33 3.2.6. Examination of Basic Design of Infrastructure system ............................................... 39 Chapter 4. Environmental and Social Considerations .................................................................. 47 4.1. Policies, laws, and regulations related to environmental and social considerations ........... 47 4.1.1. Overview of policies, laws, and regulations related to environmental and social considerations ............................................................................................................. 47 4.1.2. Procedures relating to Environmental Impact Assesment implementation ................. 50 4.2. Analysis of current environmental and social conditions ................................................... 52 4.2.1. Current state of environment in the mine of the affiliated company of the company A .................................................................................................................................... 52 4.2.2. Current state of environment in the factory of the company B ................................... 53 4.3. Expected impact from the proposed project implementation ............................................. 53 4.4. Environmental Benefits from the project implementation .................................................. 57 Chapter 5. Economic Viability ..................................................................................................... 59 5.1. Project cost estimation ........................................................................................................ 59 5.2. Preliminary economic analysis ........................................................................................... 59 Chapter 6. Implementation Schedule of the Project ..................................................................... 65 6.1. Implementation Schedule ................................................................................................... 65 6.1.1. Presentation of Project Imprementation Period .........................................................