Khaled Al Qureshi, CEO, Saudi Water Partnership Company : Interview

Khaled Al Qureshi, CEO, Water and Electricity Company

Interview: Khaled Al Qureshi

How has the tendering process for independent water projects (IWPs) lowered water production cost?

KHALED AL QURESHI: The first IWP tendering process involved the Rabigh plant, which has a capacity of 600,000 cu metres per day and is the largest reverse osmosis plant in the region. The successful bidder was a consortium led by ACWA. This was followed by the Shuqaiq-3 reverse osmosis (RO) IWP, where a consortium led by Maurbeni was the successful bidder. There are also two other projects in progress: Jubail 3 IWP and Yanbu IWP. A new lower cost of water production for desalination plants is being created for these projects.

Competition is the main factor driver causing production costs to fall. The winning bid for Rabigh was SR1.99 ($0.53) per cu metre, which is a 30% decrease in cost. Shuqaiq-3 was even lower at SR 1.95 ($0.52) per cu metre. These are some of the lowest costs ever recorded in the world for desalinated water. As part of the bidding process, we capped electricity usage at 3.5KWh per cu metre, which bidders are not permitted to exceed. For sewage treatment plants, which do not use as much energy as desalination facilities, we mandated other requirements during the tendering process and focused on cutting costs, such as the amount of sludge generated at the end of the process that needs to be disposed at a landfill. The reduced cost of service of the plants will be witnessed directly by the market, with a decrease on drinking water prices by 20-25%. As both international and local players adopt similar processes the region is likely to be impacted by even lower costs of water production globally.

How can technology-led innovation further optimise energy consumption?

AL QURESHI: Most greenfield desalination projects are adopting RO as their technology platform of choice, replacing other thermal-based processes such as multi-stage flash. RO will remain the preferred technology as it can work as a standalone process or in combination with power. Standalone RO desalination plants offer the electricity company greater flexibility, since the power plant does not need to operate at higher levels to meet water demand during winter months.

The industry also continues to innovate to optimise its energy consumption. This can be achieved by using water flows – such as the brine that is returned to the sea – and waste water flows to generate electricity. The concept is not new, but its widespread application is, and if properly developed the industry could make great progress in this area, to the point that sufficient electricity could be generated from micro-turbines to supply the entire plant. Strategically locating plants in order to take advantage of gravity when generating electricity from brine and treated sewage effluent is on the rise. Lastly, motor and pumping loads use a large amount of energy, and innovations in these areas can result in significant improvements in energy efficiency, which in turn will help to lower production costs.

What kind of agreements would improve investor confidence in the water industry?

AL QURESHI: Public-private partnerships and off-take agreements are attractive to investors, especially those seeking long-term, stable earnings. The challenge is that there are limited incentives to improve operating efficiency over the long term. There need to be more built-in incentives to encourage developers and owners to improve their efficiency, and to share savings with the utility on an agreed formula. This way, both developers and investors have an opportunity to increase their returns over the life of the project.

Leadership in Energy and Environmental Design (LEED) projects are also attractive for investors as they tend to focus on improved building designs that reduce energy consumption. LEED projects focus on innovation in areas such as lighting and motor loads used to operate pumps. New designs and applications in these areas can help to reduce operational costs.

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The Report: Saudi Arabia 2019

Utilities chapter from The Report: Saudi Arabia 2019

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