Summaries and Outcomes Jeddah, Saudi Arabia 26 October 2010

Transcription

1 The 6th Saudi Water & Power forum Session Summaries and Outcomes Jeddah, Saudi Arabia 26 October

2 Contents As a catayst for change and innovation, SWPF pays a key roe in uniting Saudi and internationa stakehoders to discuss the poicies and strategies which wi determine the future of the power and water sector in the Kingdom. In 2010 the program wi focus on how we can achieve sustainabe prosperity through knowedge, innovation and cooperation. Inauguration Ceremony H.E. Eng. Abduah A-Hussayen, Minister of Water & Eectricity H.E. Dr Hashim A Yamani, President, King Abduah City for Atomic & Renewabe Energy Day 1: Sunday, 3 October 2010 Dr. Adi Bushnak, Chairman, SWPF Advisory Committee Session 1/A : Poicies, Projects & Prospects for a sustainabe Future Session 1/B : Poicies, Projects & Prospects for a ustainabe Future Session 2 : Saudi Initiatives to Support Innovation Session 3 : Reaizing the Potentia of Technoogy in Power & Water Day 2: Monday, 4 October 2010 Session 1: Transformation of Saudi Arabia s Power & Water Sector Session 2: Renewabe Energy Opportunities & Soutions in Saudi Arabia Session 3: Energy Conservation & Demand Management Day 3: Tuesday, 5 October 2010 Session 1: Management Soutions for Water Resources Session 2: Produced Water: Waste or Resource? Session 3: Consumer Reations SWPF 2010 Recommendations

3 0 2 Inauguration Ceremony H.E. Eng. Abduah A-Hussayen, Minister of Water & Eectricity Your Roya Highness Prince Khaid A-Faisa bin Abdu Under the patronage of H.R.H. Prince Khaed A Faisa bin Abduaziz, Governor of Makkah, the Saudi Water and Power Forum was inaugurated on Sunday 3rd of October 2010 under the theme «Sustainabe Prosperity through Knowedge, Innovation and Cooperation». The forum, discussion sessions asted for three days, where a number of experts and speciaists in poicies and strategies determining future of water and power in the Kingdom articuated these issues. The opening ceremony incuded speeches by H.E. Eng. Abduah A- Hussayen Minster of Water & Eectricity and H.E. Dr Hashim A Yamani, President, King Abduah City for Atomic & Renewabe Energy. As we as an opening note by Dr. Adi Bushnak, Chairman of the Bushnak Group and Head of the forum. Aziz, Governor of Makkah Province Your Exceency Dr. Hashim bin Abduah Yamani President of King Abduah City for Atomic & Renewabe Energy Their Exceency participants and Attendees. It is my great peasure and honor to wecome you, Your Roya Highness. Aow me to show my gratitude for your kind inauguration and patronization of this Forum as your vaued participation has made the hoding of this Forum for the sixth year in Jeddah a significant event, expressing concern for water and eectricity issues. It has become the focus of attention of consumers, contractors, manufacturers and service providers in these two industries. It is aso my peasure to shed ight on the most important achievements in the water and eectricity industries and their trends in our beoved country since the convention of the Fifth Forum a year ago, and what we aspire to achieve in the future, God Wiing. Your Roya Highness, Our Honorabe Audience, As a continuation of the kind patronage paid by the Government of the Custodian of the Two Hoy Mosques, and its continuous support for water and eectricity services, more and more new projects are being impemented this year and, thanks to God, more funds are being aocated, making this year truy a year of achievements and deveopments. In the fied of Water and Sanitary Drainage, work is in progress for the expansion and improvement of the infrastructure. The costs of the projects currenty in progress amounted to neary SAR 102 Biion. The tota number of water connections exceeded 1.69 miion, and the overa ength of water pipe work amounted to 65,000 km. The tota number of sanitary drainage connections exceeded 830,000 and the overa ength of the sanitary drainage network amounted to 17,000 km. The tota number of dams constructed, or under construction, is 452 dams with a tota storage capacity of 2.4 Biion cubic meters.

4 0 74 Perhaps, the most significant event this year, with regard to dams, is the Ministry s tendency to provide a reguar suppy of potabe water from some of the argest and most productive dams in the Kingdom, particuary those ocated in the South West areas, to serve as an affuent source supporting other sources of desainated and ground water, in order to meet the growing demand for water throughout the kingdom. One of these dams is Baysh Dam in Jizan Region, which is considered as one of the argest water reservoirs in the Kingdom, as it is ocated in an affuent vaey, with a storage capacity of 194 miion cubic meters. The dam s water storage this year has exceeded 160 miion cubic meters, despite the fact that the dam reeases 50 miion cubic meters of water in Baysh Vaey to maintain natura and agricutura environments. One can say that the water storage in one singe year has exceeded 200 miion cubic meters, equivaent to the production of five years at the desaination pant in Shuqaiq (Phase I). The daiy fow rate of the vaey is 200,000 cubic meters and the tota cost of such a fow rate at a desaination pant amounts to SAR 300 miion approximatey. This means that Baysh Dam and its purification pant can recover their financing costs in eight months ony, when compared with the costs of the ast desaination project i.e. Shuqaiq Pant (Phase III), besides the priviege of being ocated at 300 meters above the sea eve, which enabes it to suppy water to the whoe Jizan area and the second pumping pant in Assir, using gravity ony and without the need for pumping equipment. I do beieve that, with God s hep and assistance, if we propery expoit these surface water resources, we wi be abe to meet the needs of A-Baha, Assir and Jizan provinces for water at east in the near future, and wi dispense with the construction of more desaination pants. This woud form huge savings of water, effort and power. The Ministry has aso emphasized its position by focusing on the management of water demand, particuary by reducing eakages in the pubic network. The funds aocated for this purpose have exceeded SAR one biion. The Ministry managed to reduce the eakage quantities in the cities covered by this project, from 25% to 7%, which is a considerabe saving of water, money and effort, when compared to the increase in production. With regard to the privatization of the water and sanitary drainage industries, the Nationa Water Company «NWC», despite being recenty estabished, coud achieve the strategic targeted resuts set in its pans for the cities in which it carried out the management of water and sanitary drainage. NWC proceeded to compete and deveop the infrastructure and enhance the services provided in both quantity and quaity. This has had a positive impact on the rea status of water and sanitary drainage services, as per the standards of service in deveoped countries, resuting in an outstanding improvement in the quaity of these services. Moreover, the company succeeded in impementing its strategic projects in accordance with the set priorities and programs, and contributed to an acceeration in carrying out vita projects and supporting and deveoping water resources, as we as investing in treated water in order to enhance the Company s earnings. NWC has entered into contracts in this fied exceeding SAR 2 Biion during the year The Company started appying the internationa FIDIC contracts for the first time on Water and Sanitary Drainage Projects «WSDP». This is expected to attract many internationa and oca companies which are quaified to participate in these projects. NWC has aso appied state-of-the-art SCADA technoogy and software for the management of water distribution networks. Furthermore, it appied the Leakage Detection System using Heium. The Company signed a contract for the management of Water and Sanitary Drainage services in Makkah and Taif, and entered into contracts with a number of consutancy firms to hande the requirements of contracts for the management of water and sanitary drainage services and operations in Medina, Dammam and Khobar, in order to invite tenders or bids for the same. Tenders and bids for other cities wi foow in succession. When the above-mentioned cities are incuded in the Company s scope of work, NWC wi be in charge of 60% of the whoe water and sanitary drainage industry in the Kingdom. The Company wi keep on carrying out its job for the deveopment and improvement of water and sanitary drainage services. Aongside this Forum, NWC is hoding a workshop on Wednesday this week to review the opportunities of investment in water and sanitary drainage projects. With regard to the water desaination industry, the Saine Water Conversion Corporation (SWCC) has competed Phase II of its privatization pan, and a the documents needed to set up the Hoding Company have been finaized and submitted to the competent authorities. Moreover, SWCC has started in Phase III of the pan and restructuring. As for the arge water and eectricity joint projects that wi be impemented by the Private Sector, thanks to God, this year the Shoaiba Desaination Pant (Phase III) has been in fu production, and has expanded its production capacity to be one miion and thirty thousand cubic meter per day. Likewise, the Desaination Pant of Marafiq Company has reached a capacity of 800 thousand meter per day, and Shuqaiq Desaination Pant Phase II has started its production, and is now producing 70% of its fu capacity, and construction works are expected to be competed next year to reach its fu production capacity of 212 thousand cubic meter per day by the beginning of next year. A of these projects produce two miion and forty two thousand cubic meter of desainated water per day, and 3,500 MW of eectric power. This is equivaent to 85% of the tota production of desainated water by SWCC, and neary its fu production of eectric power. This is a cear evidence of the huge scae of contribution of the Private Sector to this industry. SWCC has aso invited tenders for Ras A-Zour Power and Desaination Pant Project with tota production capacity of one miion cubic meter of water and 2,400 MW of eectric power per day. The contract has been

5 0 6 2,400 MW of eectric power per day. The contract the impementation of the project has just started. province, by competing the power transmission consumers cost of eectricity, owering the growth has been awarded by the end of Ramadan to Another project in Riyadh has been awarded to ine between Medina and Qassim, and it was in the peak oad, and achieving what is known a consortium of companies, with a tota cost a winning bidder on the same basis. It is caed eectrified during the month of Ramadan. This has as oad dispacement. Among the most important of approximatey SAR 25 biion, incuding the «The Eeventh Generating Power Station», with been one of the most important achievements Decrees that have been recenty issued is the extension of water ines to beneficiary cities. It a generation capacity of 1,800 MW. The Steam made under the eadership of the Custodian of the Roya Decree that therma insuation shoud be is expected that this project wi be competed Viage project with a generation capacity of Two Hoy Mosques, King Abduah bin Abdu Aziz, compusory in a buidings, and the approva of in eary 2014 AD. SWCC is currenty engaged in 2,000 MW wi be awarded under the same God Bess him, under the ong-term deveopment the Counci of Ministers of changing the votage the preparation of tender documents needed scheme. SEC is currenty impementing many pan of the eectric power industry, which aims to of eectric transmission ines to the internationa to award a contract for Yanbu Project Phase III. power generation projects, with a tota cost of enhance the reiabiity of service in the Kingdom, standard of Vots. It is expected, in the near The production capacity of this project wi be more than SAR 85 biion, incuding but not imited so as to be in ine with the best internationa future, to approve of setting up the Nationa Centre improved to meet the needs the Roya Commission to the significant Viage Pant Expansion Project in performance standards. Such achievements for the Rationaization of Eectricity Consumption. in Yanbu, to become 550 thousand cubic meter of the Eastern Province with a generation capacity coud not be made without God s hep and the In view of the chaenges facing the water and water and 1,700 MW of eectric power per day. of 3,160 MW, Shoaiba Pant Expansion Project, in gracious and continuous support of our prudent power industries, the most significant of which the Western Region with a generation capacity government to the eectric power industry, and the being the increase in growth rates, rationaization Your Roya Highness, Our Honorabe Audience The of 1,200 MW, the Tenth Power Pant in Riyadh with sincere efforts made by executives of the industry. of eectricity consumption has become an urgent eectric power industry in the Kingdom is currenty a generation capacity of 2,000 MW, and Rabigh One of the most important power transmission nationa need/concern. The surveys conducted facing a huge increase in demand, as growing Steam Generating Power Pant (with a generation projects is the Power Grid Project between Saudi about the prospects of rationaization confirm demand for eectricity has been this year 8% more capacity of 2,500 MW) whose contract has Arabia and Egypt, which is aso one of the most the promising opportunities for the investment than the peak power oad of ast year, i.e. around been awarded ast month. The tota generation important power inkage axes in the Arab Word. in water and power consumption programs, 3300 MW. The combined capacity in the Kingdom capacity of a projects under execution by SEC is On that regard, a consutancy firm is carrying on and enhancing the management of demand increased to around 50,000 MW, incuding the more than 12,000 MW. the detaied studies of this project and preparing for water and power. I see that it is now a good contributions of desaination pants and arge its tender documentation which are in the fina opportunity to invite the private sector to increase participants. The tota number of customers of Preparations are now under way to invite bidders stages, and it is expected to invite tenders for this its contribution to these matters. Saudi Eectricity Company (SEC) has become six for power generation projects during the next project in the near future, God Wiing. Upon its miion. In order to meet the increasing demand three years, with a tota generation capacity impementation, this project wi not ony make the Your Roya Highness, Our Honorabe Audience, for eectric power, a estimates of the eectric exceeding 6,000 MW, in addition to power two countries share their eectric power reserves, Keeping in ine with the Saudi Government s poicy power expansion pan indicate that there wi be transmission projects, transformer stations, and but wi make them aso interchange eectric to encourage the private sector and enhance its a need for impementing eectric power projects power distribution networks. With regard to the power at peak times which are different in both roe in participating and investing in eectric power in the coming ten years, with a tota cost of more network inter-connection inside the Kingdom, SEC countries every day. projects, to set up a convenient environment than SAR 300 Biion. The private sector is expected has with God s hep connected about 95% of a With regard to the rationaization of eectric that promotes competition in this industry, and to to contribute to around 30% of the cost of these eectricity networks operating in the Kingdom, power consumption and improving its efficiency, provide the reguatory, funding and operationa projects, i.e around SAR 90 Biion. and they became one composite network after the Ministry is carrying on with the awareness requirements needed, the Counci of Ministers competion of most eectricity transmission ines programs, in coaboration with the reevant has authorized the Board of Directors of the An agreement for one of the argest of these by SEC. The most recent ine competed was that authorities, and is conducting a number of Eectricity & Co-Generation Reguatory Authority projects has been signed this year with the private connecting the southern region with the western programs under the nationa pan for reducing the (ECRA) to review the eectricity tariff to a non sector for the construction of Rabigh Power pant, region. SEC has aso connected the transmission consumption of eectric power and enhancing its residentia consumer categories (governmenta, with a generation capacity of 1,200 MW, on the network of the western region with the transmission efficiency, in order to attain the targeted resuts commercia and industria), and to enter and basis of buiding, ownership and operation, and network of the centra region and the eastern which incude, but are not imited to, reducing the adopt any amendments thereon, provided that

6 0 8 such amendments do not exceed (26 Haaas ) per kiowatt-hour. Pursuant to this prudent decree, ECRA has compied a proposa for amending the eectricity tariff based on ceary stated scientific standards, using state-of-the-art word appications in this regard, seeking to enhance the efficiency of the eectric power system, to support the stabiity of eectric power service and its deivery to consumers, to encourage rationaization and contro of oads, and to dispace oads by using the variabe tariff that depends on the time of consumption (i.e. according to the peak hour of the day or the peak season of the year). ECRA s Board has adopted the proposed tariff and SEC has started appying this new tariff at the beginning of Juy, this year. ECRA, in coaboration with the Ministry, continues to foow up a matters pertaining to SEC in order to carry out its part within the nationa pan for restructuring the eectric power industry in the Kingdom, incuding the estabishment of an independent company for Power Transmission that woud be caed the Nationa Power Transmission Company (NPTC), power generation companies, and other power transmission companies to be owned provisionay by SEC which wi be changed into a Hoding Company. Your Highness Our Honorabe Guests The points mentioned above iustrate the growth and exuberant environment of investment in the water and power industries for the years to come, and the immensity of projects needed by the Kingdom and the promising opportunities for the participation of the nationa and foreign private sectors in the investment in these services. It is expected that the funding requirements for the expansion in the water and power industries wi exceed SAR 500 Biion (five hundred biion Riyas) in the next ten (10) years. According to these estimations, the investment opportunities wi not ony be imited to these services, but wi enhance the roe of the private sector in various investments needed by these industries, incuding the participation in the management, operation and maintenance of their projects as we as the deveopment and repatriation of their supporting industries and services. Finay, I woud ike to extend again my sincere thanks to Your Highness for your honorabe sponsorship of this Forum, and to the a the honorabe audience for their attendance and participation. I am aso thankfu to the organizing committee and the agencies that contributed to the preparation, organization and sponsorship, and to the participants in the associated Exhibition. I invoke Aah the Amighty to bestow upon us honesty in our words and deeds, grant us success and guide us in the right path. H.E. Dr Hashim A Yamani, President, King Abduah City for Atomic & Renewabe Energy, «KA-CARE» Your Roya Highness, Prince Khaid A-Faisa bin Abdu Aziz, Governor of Makkah, Your Highnesses, Exceencies and Eminences, Dear Brothers and Sisters I have the peasure of being with you tonight for the inauguration ceremony of the Saudi Water and Power Forum. I woud ike to brief you on the progress made at King Abduah City for Atomic and Renewabe Energy since the Roya Decree that estabished the City. I wi aso share with you the detais of its vision, namey, to be the driving force for the integration of atomic and renewabe energy with the nationa sustainabe energy system. The importance of energy stems from its being the main driving force of both the oca and word economies. It is expected that such importance wi increase in the foreseeabe future, and wi retain its poe position thereafter. The Kingdom of Saudi Arabia s eading roe in the goba energy andscape, together with the Kingdom s energy poicy, which has aways payed a key roe in the stabiity and growth of the word economy, shoud quaify the Kingdom to retain its eading position in the internationa energy arena. Therefore, and as a natura and ogica progression, it is expected that the Kingdom wi deveop a nationa sustainabe energy system, where atomic and renewabe energies wi effectivey and efficienty contribute to the economy. The estabishment of King Abduah City for Atomic and Renewabe Energy embodied the Roya Vision of contributing to the sustainabe deveopment in the Kingdom utiizing science, research and industries in the fieds of atomic and renewabe energy,faciitating the growth of a new energy ecosystem that woud enabe the Kingdom s transition from a country depending totay on oi and gas in meeting its energy needs, to a country with an efficient and effective energy system in which atomic and renewabe energies pay an effective deveopmenta roe. Therefore, and as a natura and ogica progression, it is expected that the Kingdom wi deveop a nationa sustainabe energy system, where atomic and renewabe energies wi effectivey and efficienty contribute to the economy. The estabishment of King Abduah City for Atomic and Renewabe Energy embodied the Roya Vision of contributing to the sustainabe deveopment in the Kingdom utiizing science, research and industries in the fieds of atomic and renewabe energy, faciitating the growth of a new energy ecosystem that woud enabe the Kingdom s transition from a country depending totay on oi and gas in meeting its energy needs, to a country with an efficient and effective energy system in which atomic and renewabe energies pay an effective deveopmenta roe. This is a ong-term nationa initiative that wi have positive impacts, God wiing, on the oca, regiona and internationa eves. It is an initiative based on accurate anaysis of the current status, couped with scientific forecasts of the favorabe future that may resut impementing this initiative. The growing oca demand on energy wi resut in triping the eectricity needed by the year 2032.

7 1 0 This is due to the growth in oca energy at the time being, continuous investment wi The first assignment that the City has carried maintaining sustainabe growth of the nationa consumption and the acceerating growth of the make aternative energy economicay viabe in out was to conduct in-depth studies of the economy wi ony be achieved through buiding nationa economy. Obviousy, this transates into the foreseeabe future. anticipated structure and content of the nationa competitive features of the nationa economy, an ever increasing demand on oi products. energy strategy, the methodoogy of work and the based on the vaue chain of atomic and This begs the question: How can this initiative meet operationa business mode for King Abduah City renewabe energies. This entais: This is evident from the remarkabe acceeration the country s substantia growing need for energy for Atomic and Renewabe Energy. This strategy in the oca consumption of oi products during in the future, which, in the absence of a nationa has a great importance in estabishing the firm 1. Drafting and impementing effective poicies the past four years. This acceeration is higher sustainabe energy system, wi require enormous foundations of the targeted sustainabe nationa and reguations. than that of other counties that have witnessed a reserve commitments of oi and gas? energy system. 2. Sponsoring internationay competitive simiar notabe economic growth. The strategy and operating mode were based research, deveopment and innovation. The Roya Vision has deineated the tasks and on studies of a number of tracks, which resuted 3. Entering into partnerships with nationa With no positive change affecting the nationa identified the mechanisms for King Abduah City in formuating a Kingdom-suitabe energy system and internationa institutions, in addition to energy system the expected increase in the for Atomic and Renewabe Energy to carry out and the vaue chain needed to serve this system. coaboration with speciaized technoogy demand on energy may have a negative impact the responsibiities with which it was entrusted. This providers. on the Kingdom s abiity to meet the goba incudes the foowing: The said studies have identified four major tracks: demand for energy in the next two decades. It is aso cear that atomic energy has many This wi undoubtedy have a serious effect on the 1. Poices and strategies. First Track: Benchmarking reevant internationa technica, operationa and investment merits, oca and word economies, and may adversey 2. Necessary reguations and egisations. expertise, and starting from where others have incuding the foowing: affect the Kingdom s eading position in the goba 3. Research and deveopment. ended, by anayzing the experience of a number energy andscape. 4. Deveoping human capacity. of countries in devising their energy systems. 1. The capacity factor of nucear energy is one 5. Set up and manage projects in order to carry of the highest in energy generation pants. Therefore, this initiative affirms the Kingdom s out its assignments, either independenty or Second Track: Identifying the vision and objectives, 2. The operationa ife of one cyce of nucear readiness in deaing with new deveopments in in coaboration with other entities in order to and prescribing the targeted energy mix. fue is ong and stabe. the future goba energy andscape in such a way buid an economic framework for the atomic 3. In terms of word prices, the economics of that woud maintain its position and enhance the and renewabe energy resources. Third Track: Buiding up the nationa economy eectricity generation from nucear power strength of its nationa economy. 6. Representing the Kingdom before the reevant sector that serves the targeted energy mix, stations is competitive at the moment, when internationa institutions. incuding industry, research and deveopment, compared with fossi fue power stations. This initiative suggests using mechanisms that 7. Meeting the nationa obigations in a as we as buiding up human capacity and 4. Nucear safety standards have improved proved their effectiveness. The word is graduay agreements that have been signed, or wi be speciaized expertise. significanty, and do not necessariy depend moving towards substituting oi and gas energy signed, in reation to atomic and renewabe on human intervention. with renewabe and atomic energies. It is expected energies. Fourth Track: Proposing the organizationa 5. Preiminary capita investment is very high, but that the share of atomic and renewabe energy 8. The Roya Order has assigned a permanent structure and byaws of the City as we as its it is counter-baanced with ow operationa wi reach 19% of the overa instaed energy ocation for the City that shoud incude operating mode. and maintenance costs. capacity by the year research and deveopment centers and 6. Nucear power stations provide attractive and aboratories, in addition to a other faciities A these studies have ceary indicated that the high vaue added empoyment opportunities. Notwithstanding the fact that depoying needed to enabe the City to fuy perform the move of the Kingdom towards an energy mix aternative energy is not economicay competitive tasks assigned to it. based on atomic and renewabe energies whie

8 1 2 Likewise, renewabe energy has technica, the sun and the wind. This means that, at the This again begs the question: How can we mature. The difference between the peak oad operationa and investment merits, such as: time of unavaiabiity, eectric power can be determine the best nationa energy mix? and the basic oad, in winter, shoud be provided suppied ony if some surpus power is stored at by fossi fue power stations. 1. Generation of eectricity from renewabe time of avaiabiity. There is no doubt that the targeted mix wi incude energy is not accompanied with undesirabe 3. Renewabe energy efficiency is substantiay a combination of atomic and renewabe energies The situation is different in summer as the demand emissions or waste. It is very safe. ess than nucear energy efficiency. Hence, it such that it meets the foowing criteria: increases and the peak hour is different. This means 2. The Kingdom is bessed with abundant is inappropriate for heavy power consumers, that it is economicay viabe to use renewabe soar radiation that makes soar eectricity such as manufacturing. 1. Maximizing the oi saved. energy to meet the needs during daytime hours, generation more efficient than most countries. 4. The renewabe energy system is affected by 2. Seecting an energy source having a high oad in addition to the power generated by nucear 3. Renewabe energy requires no fue, and environmenta factors, such as humidity, dust, factor and stabe generation for stabe winter. energy. Fossi fue power stations wi sti be required therefore its operationa costs are very ow. and sun bocking, which may resut in suppy 3. Seecting a dynamic source that is capabe of in order to meet peak oad needs. Renewabe 4. Renewabe energy can be used for utiity- disruption. responding to the eectric power needs in the energy can be used more efficienty when energy scae generation, and it can aso be used for summer. storage technoogy becomes mature. It is aso domestic, pubic and commercia roof-top Simiary, it is cear that the nationa energy system 4. Maximizing the amount and efficiency of the cear that no matter what structure the energy generation, as we as in remote areas. cannot excude renewabe energy, because nationa power production system. mix assumes, there are promising opportunities for 5. It is expected that production costs wi dependence on nucear energy ony wi have the 5. Maximizing the participation in the the Kingdom in targeting certain technoogies, fa substantiay and over a ong period of foowing disadvantages: deveopment of nationa manpower such as: time due to the internationa trend towards speciaized in atomic and renewabe energies. dependence on renewabe energy. 1. The operation of nucear power stations shoud 6. Maintaining a eading goba position in Concentrated soar therma 6. The Vaue Chain of renewabe energy, from maximize the capacity factor, to recoup targeted technoogies. Desaination using atomic and industry to power stations, provides much the investment in a meaningfu timeframe. 7. Optimizing the deveopment of the Vaue renewabe energy more job opportunities than traditiona energy Therefore, nucear power stations are most Chain in both atomic and renewabe energies. Cooing technoogies system. suited for base oad generation, but are Energy storage technoogies 7. Renewabe energy has a promising future for not suitabe for seasona or daiy peak oad A cose inspection of the annua pattern of both individua and institutiona investors, and variations. eectricity demand in the Kingdom reveas that it represents a fertie environment for research, 2. Nucear power stations with ow capacity (ess the average daiy oads in winter are 40% ess than deveopment and innovation. than 100 MW) are not commerciay avaiabe. the average daiy oads in summer. In addition, 8. Capita investment is high, but operation and Therefore, they are argey oversized for sma the peak daiy oads in the winter or the summer maintenance expenses are very ow. consumers or remote areas. vary ony sighty during the day. 3. The prices and suppies of nucear fue are, at Having said that, the nationa energy mix cannot, times, uncertain. Accordingy, eectricity generation from atomic however, excude nucear energy, because 4. The construction of nucear power stations energy is idea to meet the basic oad in winter, dependence on renewabe energy ony wi have takes as much as 10 years. Nucear energy because the cost of construction of nucear power the foowing disadvantages: cannot, therefore, be reied on for short-term stations is much higher than their operating costs, demand on eectric power. and therefore the stations shoud be operated 1. The capacity factor of renewabe energy is 5. The Vaue Chain of the nucear energy with the maximum possibe capacity to ensure substantiay ow, which makes it inappropriate system can ony be deveoped nationay their economic viabiity. Given that the peak oads for basic oad generation. by everaging very ong-term investments, in winter occurs after sunset, it is inappropriate to 2. The renewabe energy system operates ony at and contributes to the nationa economy, use soar energy to meet the needs of peak oads the time of avaiabiity of its resources, such as therefore, in the medium to far future. as ong as energy storage technoogy is not yet

9 1 4 The success of the seected nationa energy mix, which is based on atomic and renewabe energy in addition to traditiona energy and energy conservation, wi be based on four main tenets: Day 1: Sunday, 3 October Providing appropriate funding mechanisms for a types of energy, in a dynamic structure that responds to time-reated changes. Quaifying the human capacity needed to manage and deveop the energy mix. Quaifying, buiding, supporting and enabing providing the industria infrastructure and support faciities. Competing the reguatory framework to make the proposed system sustainabe. Day 1 - Session 1/A : Poicies, Projects & Prospects for a Sustainabe Future Chairman: Dr Adi Bushnak, Chairman, Bushnak Group & Past President, IDA Keynote Presentations: H.E. Dr Mahmoud Abu-Zeid, Former Minister of Water Resources & Irrigation, Egypt & President, Arab Water Counci Dr Hussain Sindi, Project Manager, A-Aghar Group The preparation of the energy mix wi require ongoing studies as we as fu and constructive consutation with the competent authorities in order to agree on aternatives that can be submitted to the Supreme Counci of King Abduah City for Atomic and Renewabe Energy to enabe the Counci to take the appropriate steps to adopt the suitabe aternative that puts the sustainabe nationa energy mix in the core of the nationa strategy. Dr Adi Bushnak, Chairman, Bushnak Group & Past President, IDA On behaf of the Advisory committee I woud ike to extend a warm wecome to distinguished Ministers, speakers, sponsors and guests of SWPF. SWPF pays a key roe in aying down the poicies and strategies that wi determine the future of power and water on the one hand and in guiding investors in accompishing their objectives on the other. This year s forum, under the theme Sustainabe Prosperity through Knowedge, Innovation and Cooperation, wi serve as a catayst for change in the power and water sectors in the Kingdom. I am peased to announce a new partnership between SWPF and A-Aghar Group, an independent non-profit think-tank in the Kingdom. The partnership is working on a study and recommendations on how Saudi Arabia can become a eader in knowedge and innovator in power, water and renewabe energy. I woud ike to take this opportunity to thank H.R.H. Prince Khaid Bin Faisa Bin Abduaziz, Governor of the Makkah Region for his continued endorsement and H.E. Eng. Abduah A-Hussayen, Minister of Water & Eectricity, for his ongoing support and commitment to the success of SWPF. I hope you enjoy the forum and make the most of the opportunity to network, join the debate and deveop your business. I ook forward to meeting you and to receiving your feedback. Yours faithfuy, On behaf of the SWPF Advisory Committee

10 1 6 H.E. Dr Mahmoud Abu-Zeid Former Minister of Water Resources & Irrigation, Egypt & President, Arab Water Counci Dr Hussain Sindi, Project Manager, A-Aghar Group, Project manager of Water and Power study through A-Aghar group and a professor of computer science in King Abdu-Aziz University H.E. spoke about the Arab Counci with its various discipines in a matter reating to water, and invited attendees to attend the coming forum convened every two years, which states basic tasks performed by Counci, incuding counting and assessment of water resources in Arab word every two years. Consequenty, he historicay shed ight upon civiizations buit on water, specia conditions of renewabe water source scarcity in Arab word, and presents an accurate statistics in this regard. He aso mentioned the mean chaenges facing Arab word, incuding water scarcity, food security, hardship to get water, exposure of sources to unsafe environmenta conditions, and inabiity of body responsibe for water sources governance. In addition to, he noted some facts about Arab word, incuding that 65% of Arab word water came from outside sources, and drawdown rate from groundwater in KSA exceeds by fourfod than the rate of annuay refi of groundwater tank. After giving a brief overview of A-Aghar an independent, not-for-profit think-tank, Dr. Sindi started by taking briefy about the importance of water, the universa water shortage and he continued saying, when ooking at the acceerated pace of growth of domestic demand versus the Kingdoms pan to expand both parts of this sector, one reaizes that suppy does not match the potentia increase in demand, keeping in mind that the rate of increase in demand for eectricity during the period from 1998 to 2008, amounted to 85% compared to ony 70% in growth of the Kingdoms abiity to generate eectricity during the same period. Aso the increase in the proportion of agricutura consumption exhausted 88% of the kingdoms tota water consumption, which in turn ed to the depetion of non-renewabe groundwater resources. It is shown here that the transformation of the water and eectricity sectors in the kingdom require not ony the financing of arge projects to expand the productive capacity but aso a comprehensive pan for reform and deveopment As for foods, he mentioned a statistics, contains that 80% of food production depends on irreguar rain, and irrigated agricuture share is estimated by 90% of avaiabe water resources. Regarding drink water and sanitation, the water is not provided to one miion peope, and sanitation networks are not avaiabe to 77 miion person. He aso spoke about the concept of integra management system aiming at increasing utiization from a water resources through maximizing use efficiency. Furthermore, he noted the necessity of baancing between suppy and demand, through water use conservation and it reuse. Concerning water demand management means, he mentioned investment in technoogies minimizing water demand and improving water connection services, participation of users at a eves as to panning, management and provision of irrigation water, as we as, provision of home uses water, industria activities and number of means to achieve them. As for speaking on executive steps to increase water management, he mentioned minimizing water osses in irrigation system, minimizing consumption through better management of crops, water reuse, controing foods and inundation, education and scientific research, decentraization, participation of water users, and expanding extent of farmers participation. Concerning innovation in institutiona management, he numerated some of adopted systems in different Arab countries, incuding one institutiona structure for water resources management, and other decentraized systems. Then he mentioned some types of untraditiona water that may be used to decrease the existing gap between suppy and demand, such as disentaied water and wastewater treatment. Finay, he emphasized on the necessity of increasing genera investments, costs recovery, participation of private sector in sanitation, and consequenty he concuded with underining on the importance of governance in water management, transparency and spreading decentraization in water sector management. From that perspective, A-Aghar group in coaboration and agreement with A-Bushnak Academy, have prepared a report as a preiminary step for the initia study which is expected to be reeased at the end of The report covers a detaied study of the water and energy sectors in the kingdom, based on cear foundations that are associated with an assessment of the current situation and future visions for the needs of the kingdom, in ight of avaiabe resources on the one hand and constraints that infuence them on the other. He then expained the methodoogy A-Aghar has foowed to deveop the study, by conducting a workshop in King Abduah Economic City. The format of the workshop incuded brainstorming sessions and engaging 65 experts, professionas, stakehoders, decision-makers and inteectuas from across the Kingdom, to be contributors to this study. The outcome of this was the vision, mission, a ong range pan and quick wins focusing on different aspects the human deveopment, the financia, technica, egisative and ega aspects; and the private sector s contribution to the deveopment of these sectors in the Kingdom. The study aso proposed a strategic framework which is based on three piars or thrusts: enabers, production and consumption that wi be detaied in the study and presented to the decision makers. Dr.Sindi addressed the first and most important issue A-Aghar had to dea with, which was the current situation that was found to be more compex with many conficting interests were at pay Here, around 15 important eements were specified some of which are the current tariff regime, the gap between government or water and power strategic direction and the pubic vision or response,

11 1 8 the uncear priorities for water and power consumption in the absence of a comprehensive nationa pan, the ack of cear egisation and absence of government bodies tasked with monitoring consumption, the weakness of renewabe sources for drinking water, the poor sewage treatment and not taking advantage of it in agricuture. Wasting non-renewabe water resources in agricuture production and aging desaination pants. Dr. Sindi aso addressed the probem of the cuture of the individua interest overriding the cuture of pubic interest with regard to the serious probem the kingdom wi face in the next 10 years if no serious measures were taken. Here he quoted Dr. Adi Bushnak in saying If we don t take it persona, we take it home to our chidren we te them just a minute, this running tap here is reay ife running to waste. Dr. Sindi concuded by mentioning that the report has been distributed to a the forum attendees and invited them to be part of this initiative and enrich the report with their vauabe input and feedback. SWPF2010 Press Conference: From Left, Dr.Sindi, Dr.Adi Bushnak, H.E. Dr Abu-Zeid, and Mr.Fahad Abunasr CEO of A-Aghar Group Day 1 - Session 1/B : Poicies, Projects & Prospects for a Sustainabe Future Moderator : Dr Adi Bushnak, Chairman, Bushnak Group & SWPF Pane: H.E. Dr Abduah M A-Shehri, Governor, Eectricity & Co-Generation Reguatory Authority (ECRA) Dr Mohammed A Saud, Deputy Minister for Water, Ministry of Water & Eectricity Dr Abduah M A-Shehri, Governor, Eectricity & Co-Generation Reguatory Authority (ECRA) H.E. Dr. Abduah A- Shehri, Governor of Eectricity & Co- Generation Reguatory Authority (ECRA) started with a retrospective ook at the history of the Saudi eectricity Sector which started as a private sector unti the tremendous economic growth in the eary 70 s which caed for the government to intervene in order to sustain the deveopment through financing and managing. The growth and expansion in services continued ever since. Upon a review of the status of the eectricity sector in 2000, a decision was made to aow the private sector to participate more activey and to estabish an entity which can be restructured to aow the private sector participation on pain fied bases and finay to estabish a reguator. And the first mission was to ay down the rues and reguations that wi assure sustainabiity of the eectricity suppy. He shed some ight on the high and increasing demand growth of the kingdom since 2000 and the eve of government support without which the tariff woudn t have provided sufficient funding to meet the expansion. The eectricity reguatory authority since its estabishment worked on estabishing and issuing the eectricity aw which indentifies the responsibiities of each party invoved the government, the private sector, the reguator, and others. The duties of ECRA are great but wi create a ong-term fruitfu resut. Finay, he emphasized on his wish for the deveopment in renewabe energy to be not ony deveopment of usage, but aso of production which wi justify any support that the government can provide.

12 2 0 Dr Mohammed A Saud, Deputy Minister for Water, Ministry of Water & Eectricity Dr. Mohammed A-Saud, Deputy Minister for Water, Ministry of Water & Eectricity, taked about the cimate change and how if it continued, the temperature increase in the kingdom wi put more pressure on the ground water used for agricuture and domestic water use. He mentioned that the ministry tried to narrow the gap by raising the eve of dependence on nonrenewabe resources to the eve of renewabe resources. He aso taked about the possibiity of rain probems which cas for a need to put a strategy to protect the cities from fush foods and make use of it as an additiona water resource. Finay he spoke about the initiative between KACST and the ministry and its effort to buid a desaination pan in A-Khafiji to produce desated water using soar energy with the production of about 30,000 cubic meters per day. After thanking the organizers for their exceent work, Dr. Abduah A- Shaikh, Deputy Governor for Panning and Deveopment and the moderator of the session started it by giving an introduction about innovation through defining it as not ony the invention of a new idea but aso expoiting it in a manner that resuts in an added vaue and bringing it to the market. He then pointed out the main eements necessary for creating an environment of innovation which are atmosphere, communication, chaenges and processes. Later he introduced the audience to the goba innovation index and stated that the Kingdom, being in the midde of the index, has a chaenge of cimbing up the adder through initiatives that contribute to creating the right environment for innovation. Finay, as one of the main initiative supporting innovation, he pointed to King Abdu-Aziz and his companions Foundation for the giftedness and creativity (Mawhiba) and presented its goas of offering necessary sponsorship to gifted students and inventors, encouraging citizens to generate creative ideas and producing a new generation of creative youth in a fieds of science and technoogy. During the audience questions and comments session, HE Minister of water A-Hussaini stressed the importance of raising Tariff to achieving sustainabiity. After which, Dr. Adi acknowedged the great effort the minister is putting on convincing the decision makers to restructure the water tariff and urged him to continue. Day 1 - Session 2 : Saudi Initiatives to Support Innovation Moderator : Dr Abduah A-AShaikh, Deputy Governor for Panning & Deveopment, SWCC & Director, IDA Pane: Dr.Omar A-Harbi, Director, Nationa Center for Water Research, King Abduah City for Science & Technoogy (KACST) Dr. Raed B kayrat, Manager, Industry Coaboration, King Abduah University of Science & Technoogy (KAUST) Dr Faeh A-Suaiman, Vice Rector Technoogy Deveopment & Industria Reations, King Fahd University of Petroeum and Mineras (KFUPM) Dr.Omar A-Harbi, Director, Nationa Center for Water Research, Dr. A-Harbi highighted the initiative for soar water desaination, which is the first of its kinds in the Kingdom. It is the best strategic choice to provide drinking water for the Kingdom. Whie the Kingdom is aready producing more than 18% of goba desainated water, the major probem is cost of production driven by high energy consumption. The Kingdom is, however, advantaged with a high eve of sunshine. KACST has more than 30 years of experience in promoting the use of soar power. In this vein, KACST has started the initiative of a joint research cooperation with IBM. Together, they have deveoped many technoogies in the fied of soar energy and desaination. The cooperation s efforts have produced technoogy that reduces the cost of soar power and desaination. One of the major targets of the initiative is to have a water desaination conducted by soar energy. This initiative wi be impemented in three phases. Before detaiing the initiative, Dr. A-Harbi discussed the objective of desaination in KSA and the committee estabished for this initiative. The objectives are: 1. To desainate seawater by soar energy at ow cost to contribute to the Kingdom s water security and support the economy.

13 2 2 To make use of nanotechnoogy techniques deveoped in the fied of soar energy To buid advanced industry in KSA supported by the industria strategy of ministry of commerce 2. and industry 3. To deveop a cean energy and protect the environment 4. Dr. A-Harbi then highighted the IBM-KACST cooperation and the projects invoved. He expained that the KACST-IBM s joint cooperation through the center of nanotechnoogy has deveoped many technoogies in the fied of soar energy and membrane. Dr. A-Harbi concuded by saying that the above initiative wi resut in knowedge-based economy products. The Ministry of Commerce and Industry have a nationa industry strategy where R&D resuts (such as these of KACST) estabish production companies and deveop industria custers that wi utimatey distribute these products in oca and internationa markets. Dr Faeh A-Suaiman, Vice Rector Technoogy Deveopment & Industria Reations, King Fahd University of Petroeum and Mineras (KFUPM) Dr. Faeh Asuaiman, Vice Rector Technoogy Deveopment & Industria Reations KFUPM, Started by stating the vita importance of technoogy deveopment and knowedge based economy to Saudi Arabia as no country in the word can depend on one commodity. He then taked about Dhahran Technoogy Vaey roe in this aspect starting with the first tenant of King Abduah Science park Shumbergere, who in two years doubed their business and created a winning experience for Shumbergere, Aramco and KFUPM as ots of the professors and students got to dea with a new cutting edge technoogy. He then taked about the creation of Dhahran techno-vaey and expressed KFUPM s gadness at this being taken by other universities in Riyadh and Jeddah and hoped for many others to Dr. Raed B kayrat, Manager, Industry Coaboration KAUST. Dr. B kayrat started by defining KAUST as not merey a university but rather a much more wider scope institution buit upon many piars one of which is economic deveopment. He then isted and briefy expained the foowing main initiatives and programs under economic deveopment: An active industry coaboration program with two sides one focusing on business and one on R&D which insures that industry advices research on the topics they woud ike to see them operate on and opens the path for commerciaization on the back-end, a Research park where companies can buid their centers in conjunction with KAUST, an Innovation Custer dedicated for cean technoogy companies to come in, demonstrate and prove their technoogies such as New energy oasis on which one current initiative is soar PV, Technoogy transfer office and innovation group, an Eary stage fund initiative, an Entrepreneurship Program, and an Active Seed Fund Program on phase two with over two miion doars dedicated funding. come. He aso isted the main activities in Dhahran techno-vaey starting with King Abduah Science Park (KASP) with the goa of having the technoogy partners to estabish their own R&D programs and R&D centers in the university and focus the research of the university on the needs of the kingdom. KFUPM s ambition is to foow MIT mode who has the size of KFUPM and has estabished throughout the history companies that have a tota GDP which woud pace them if they were a country as number 27. He then mentioned that KFUPM is targeting mainy two technoogies petroeum gas and chemicas and secondy water in which they have not yet been successfu to work with a partner and hope to have NWC or the ministry as a partner. He then taked about the technoogies produced by KFUPM incuding 52 patents, five more under registration, 188 appied patents and 83 not yet fied. And the university s target is to match MIT with 150 patents per year, the business incubator and its nationa business pan competition, aiance of their base and consuting services to hep nationa sma and medium businesses and finay SciTech state of art science museum which heps in impanting the ove of technoogy and science in the kids and disseminating innovation. He concuded by saying that the word university doesn t do KAUST justice as it is a massive project that s sti taking off and has eements that go across the board from education, advanced R&D as we as economic deveopment he stated how it is very important for KAUST to ink with the industry as they deveop this project.

14 2 4 Day 1 - Session 3 : Reaizing the Potentia of Technoogy in Power & Water Moderator: Leon Awerbuch, President, LET & Past President, IDA Pane: Dr Gary Amy, Director, Water Desaination & Reuse Centre, King Abduah University of Science & Technoogy (KAUST) Dr Ahmed A-Arifi, Director Genera of Research &Technoogy Department, SWCC Dr Tomás Miche, Director R&D Deveopment, AGBAR Paddy Padmanathan, President & CEO, ACWA Power Internationa Starting on the pane was Professor Gary Amy, Director, Water Desaination & Reuse Centre (KAUST), who presented a rich speech that focused on water desaination. Then he taked about the issue of renewabe energy driven desaination and isted many components that can be used ike ower green house gas emissions, ower chemica utiization, but stated that it isn t the components but rather the integration of a those components through an incrementa improvements process that matters, presenting as an exampe a concept deveoped by the Singapor PUB in deveoping a technoogy road map for new desaination technoogies. Recommendations: Dr. Amy then caed for joining forces as we go forward so as to avoid research redundancy and the worst scenario of a operating in secret and doing the same thing. He stressed on the importance of synergy, joint research and win-win coaborations an exampe of which is a coaboration initiated by SWCC on desaination that invoved KACST and a the major universities in the kingdom in deveoping a strategic research strategy for severa projects in desaination. He taked about many areas of interest to current research for making sea water desaination a greener technoogy through ots of approaches in terms of creative intakes, outfa design, the use of green chemicas, inorganic and organic composite membrane that are ower faing and higher permeabiity, and exporing new processes ike forward osmosis, a new process that can operate under much ower energy requirements, membrane distiation which is a therma membrane hybrid, a technoogy which KAUST has been very active in deveoping, partia desaination which can be used for aquacuture and coud be operated in a much more cost effective bases, optimization of integrated membrane systems and minimizing the chemica use. He aso caed for doing research that is industriay driven, industriay sponsored and eads down a pathway to product commerciaization. And athough shared IP is a chaenge for such research, it can certainy be negotiated. Finay, he taked about moving research into the market pace through technoogy incubators. He mentioned KFUPM s technoogy park as an exampe and stated that this practice is being adopted by universities in and out of the kingdom acting as vehices for a new startup companies and potentia spin offs.

15 2 6 Dr. Ahmed A-Arifi, Director Genera of Research &Technoogy Department, SWCC taked about research programs in saine water Conversion Corporation and how it is reated to the technoogy. SWCC saine water desaination research institute (SWDRI) offers services for nationa and internationa organizations with the main objective of transferring and deveoping saine water desaination technoogies. In its research institute in Jubai, SWCC has a piot pant for different technoogies through which they work with others ike Armco and SASAKURA in joint research. He then isted some of SWCC achievements which incude patents appied on their pants in Umuj and others to be appied in Hag/Duba, research coaboration with different organizations ike: Saudi Armco, the Water Reuse and Promotion centre, SASAKURA, PUB, King Abdu-Aziz City for science and technoogy (KACST), A-Faisa University, and European desaination society. This is in addition to working with the private sector in joint research aiming at commerciaizing the product as is being currenty done with META water in a project for ceramic membrane. He then isted severa current research programs on modeing for therma, desaination and beach we test, a business with other organizations. In addition SWCC has a nationa pan program for five years to work on a project entited Centre of Exceence for Research and Studies of Desaination Technoogy. The project wi be carried out by SWCC, KAUST and the private sector SWCC is putting an effort to bring together a peope interested in desaination in a meeting caed unifying research which is aready in its round. The outcome of these meetings is a draft proposa which needs to be funded and is to be impemented by a those who are interested in this project. About their future pans, Dr. A-Arifi said that SWCC is panning to deveop various desaination technoogies specific to KSA and caed for others to join hands with SWCC saying that they have the faciities, the experience in operation maintenance, yet they need to coaborate with universities or private sector in working together to deveop the technoogy. They are aso ooking for non-renewabe energy resources in desaination, soar energy, in a current project with KAUST, deveoping aternative desaination anti-scae and are ooking hard for either manufactures or a university to work with them, deveoping various membrane types, improving the quaity of currenty used desaination materias, and enhancing technica coaboration with other estabishments. He concuded by stressing on the fact that SWCC is wiing to provide others its services and wecomed anyone who has a project he wants to test his materia or wants to work with them in joint research. Dr. Tomás Miche Director R&D Deveopment, AGBAR, gave a perspective from an internationa operator which operates mainy in Spain, a country who has many simiarities to KSA in terms of great water stress, reative high temperatures and other probems. He mentioned two areas which hare of a specia importance for technoogy and reated R&D. The desaination of sea and brakish water and the use of regenerated waste water. In desaination, Agbar has an interest in pre-treatment optimization. They are ooking for operation protocos on the side to decrease fouing, couping renewa energy resources to desaination, working with new materias ike oxidant resistant membranes and Nano engineered membranes stating that he beieves Nano technoogies wi be one of the major breakthrough in the water industry in genera, and finay the vaidation at a demonstration scae of the different pretreatment options before desaination. In water reuse to treat and dispose is an absoute concept, especiay in water scarce regions. Because you coud save on drinking water quaity stocks, make a better more efficient use of water resource and manage water better, increase the amount of avaiabe resource, guarantee water suppy during drought episodes, reduce or improve the discharge to receiving media, and you can even think about reusing nutrients present in wastewater for agricuture. But in order to reuse water you need to have a ega framework for reused water, which took Spain 10 years of discussions, you shoud be abe to treat according to fina use, and gain pubic acceptance of the reused water. Another important issue is substantia economic tariff modes, which sustains and support this empoyment and depoyment of new technoogies. Finay he taked about internationa cooperation, presenting Agbar s mode for internationa cooperation and for growth of their R&D and mentioned they are working on a project here in Saudi regarding setting up a water training center incuding an R&D center to be deveoped in Jeddah and provide technica training, genera training, R&D and management and professiona deveopment. Paddy Padmanathan, President & CEO, ACWA Power Internationa, expained that in order to achieve a its other objectives, Acwapower found it best to focus on reducing the cost of 1 cubic meter and one KW of energy. He shared one exampe showing how technoogy and innovation has a direct impact on up to 85% of desaination cost. To show that this is not a mere theory but rather a reaity, Mr. Padmanathan presented a ive exampe in Shuqaia where a reverse osmosis desaination pant was impemented to effect in 30% saving in cost resuting mosty from the new technoogy.

16 2 8 Day 2: Monday, 4 October 2010 Day 2 - Session 1 : Transformation of Saudi Arabia s Power & Water Sector Chairman: Thamer S A-Sharhan, President & CEO, Marafiq Keynote Presentations: Steve Boze, President & CEO, Power & Water, GE Energy Paddy Padmanathan, President & CEO, ACWA Power Internationa Eng Ai Saeh A-Barrak, President & CEO, Saudi Eectricity Company And at the poicy eve, the key aims shoud be: Enhancing capita formation outside the government s budget and without soveirgn guaranties Creating an enabing environment with fosters competition Improve sector efficiency through competition, accountabiity, profit incentives, and manageria economy. And above a, ensuring universa access making socia desirabe subsidies expicit, and traceabe with the end user. No reform efforts wi succeed in isoation.. The diaogue and consutation are the keys to progress. Mr. A-Sharhan commented. After that Mr. A-Sharhan introduced each of the speakers starting with Mr. Steve Boze Mr. Thamer A-Sharhan, President & CEO of Marafiq, wecomed the deegates and spoke about the importance of transforming the water & power sector of the kingdom. He stated that reforming the infrastructure is one of the key priorities of many emerging economies, and the reform efforts in Saudi Arabia is going and the poicies are cear, certain irreversibe steps have aready been taken and many others are schedued. Today we have eectricity & cogeneration sector reguatory in pace working cosey with the stake hoders on the industry restructuring. Setting such market structure and roes insure fast and quicker private sector responds to achieve the overa sector goas. Steve Boze, President & CEO, Water & Power, GE Energy. He gave a brief introduction about GE vision and their focus areas, after that he spoke about the transformation of Saudi Arabia s water & power sector and it s demand stressing on three key messages: Advanced technoogies are required Many of these technoogies exist but need to be depoyed to meet chaenges in SA. Increasing investment going to be required Strong poicy for ocaization shoud the focus for going forward He aso stated that the main reform themes are as foows: Encouraging efficient depoyment of the fossi fue Protecting the environment Encouraging aternate technoogies Investing in renewabe Suppy diversification Network integration Encouraging market competition Tariff reforms After that Mr. Boze spoke about some important figures and facts for Saudi Arabia as foows: h Goba environment - He presented The Muti-Speed Recovery word map that showed the position of Saudi Arabia s growth rate (5%) among the goba context during h Eectricity demand growth in the Midde East in the next 10 years is 159 GW with a very diversing technoogy mix, which are most impacted by Poicy, certain strategic areas of fue independence, and the ong term growth in the given market. h Water reuse enabers are technoogy, economic, and poicy h Advanced technoogies are required for diversification of fue resources, energy efficiency drive, sophisticated grid connectivity, and water scarcity. Paddy Padmanathan, President & CEO, ACWA Power Internationa. He argued that the water and power sector can support the transformation of the Kingdom into a knowedge based economy, and started to give an outook of what actuay took pace during the ast 5 years: h h h The Private sector investments in the W&P increased from zero to 50 biion The private sector earnt how to co-contribute not ony to exist. The poicy frame work has matured in parae to the improvement in the private sector as: Private pubic partnership has been a success and working The decision has been taken to diversify the fue mix beyond oi and gas to renewabe and nucear. Fue is sti priced at a subsidized rate for power generation & desainated water production, efficiency of fue utiization is now being recognized as important.

17 3 0 h The sector as a creator of socia economic vaue: Empoyment creation the opportunity to increase Saudi citizen participation Marshaing Private Sector Investment There is enormous iquidity avaiabe. At ast the true vaue of this sector as a safe investment domain is being recognized. Spreading profit generated to the citizen via pubic participation in ownership through (IPO) Creation of Knowedge Research and Deveopment Mr. Padmanathan went on stating certain recommendations and remarks regarding the reform from business perspective, and regarding the KE transformation. Eng Ai Saeh A-Barrak, President & CEO, Saudi Eectricity Company. He highighted the current situation of the power sector in Saudi Arabia stressing on the soar power system as it is the argest of the region in terms of capacity, market capita and energy sod. He went on to remark that there are a number of chaenges facing the power sector and opportunities to meet these chaenges as foows: Chaenges: As for the reform he mentioned that we need to : Vaidate the vaue that the mode of private sector co-ownership & operation is deivering Increase the eve of private sector participation through PPPs Extract vaue by maintaining fair pay in procurement And stressed on Keeping the competitive environment cannot be emphasize enough High growth in demand (wi continue 78%-). Power is most capita-intensive sector. High consumption for residentia use (55%). Low residentia tariff (8 haah /kwh). Low average oad factor (55%) seasona. Inefficient od generating units. And for making the transformation to knowedge based economy : Opportunities: Increasing appetite for competitivey priced goods and services to support the increasing size of the power and diese capacity wi give the impetus to transform the Saudi economy that used to be based on ow energy cost and cheap imported abor to a knowedge based economy. Moving towards higher vaue added manufacturing-more precision engineered product manufacturing Higher vaue services Introducing the best avaiabe technoogy in the word into a new projects to provide the kingdom with a patform to feed R&D faciities being provided via KAUST, KACST and others. Repace a the od generation units. Promote energy conservation initiatives. Load management programs (time of use tariff). Introduce smart grid and smart meters. Encourage and support renewabe energy. Reguatory framework shoud exist. Energy efficiency (using efficient appiances) Eng. A-Barrak concuded by saying «Chaenges are great but Opportunities are greater» At the end Mr. Padmanathan concuded the presentation with asking «How can the Private Sector contribute to the vaue added growth in the Kingdome?», and he summarized the answer into the foowing points: Mr. A-Sharhan cosed the session asking the pane «How can we transform our sector to a knowedge based economy?» «As the kingdom moves to recognizing the true vaue of fue and recognize the efficiency naturay, we wi move toward the knowedge based economy». Mr. Padmanathan answered. Deiver best avaiabe technoogy (BAT) at each possibe opportunity Locaize manufacturing and utiize the oca suppy chain Deveop Saudi Technica capacity particuary at technician and operator eve.

18 3 2 Day 2 - Session 2: Renewabe Energy Opportunities & Soutions in Saudi Arabia Moderator: Ahmad A-Khowaiter, Director of New Business Evauation Department, Saudi Aramco Keynote Presentation: Dr Khaid A-Suaiman, Vice President for Renewabe Energy, King Abduah City for Atomic & Renewabe Energy (KA-CARE) Pane: Dr Ghassan Jabbour, Head of Soar Deveopment, KAUST Roger M Othman, Faciities Panning Department, Saudi Aramco Hani Zahran, Manager of the Nationa Earthquake & Vocano Centre, Saudi Geoogica Survey (SGS) Saman A-Jishi, Vice Chairman of the Industria Committee, Counci of Saudi Chamber of Chamber of Commerce & Industry Vahid Fotuhi, Director, BP Soar Midde East Dr. Khaid A-Suaiman, Vice President for Renewabe Energy, (KA-CARE), After thanking the organizers and wecomed the speakers and the audience, Dr. A-suaiman started the session by giving an introduction about KA-CARE vision, mission, and the strategic goas stressing that the Roya Decree has highighted and focused on estabishing this city to serve the sustainabe deveopment of Saudi Arabia in moving toward a sustainabe energy mix, and to try to be a goba eader in energy sector, and to fufi that we wi need to work on changing the cuture, from education up to a segments of the vaue chain. KA-CARE was given a arge mandate covering different segments: Setting the poicy and the country strategies reated to the sector Being a reguator in both sectors Responsibiity to be invoved in technoogy deveopment Responsibiity to deveop the human capacity, whether in R&D or in industry. Dr Ghassan Jabbour, Head of Soar Deveopment (KAAUST). Dr. Jabbour spoke about the centre s vision and its strategic goas, aso spoke about the reasons of using soar energy in the kingdom, and at the end he concuded saying «...the economics of soar energy may someday ook much ike the economics of fossi fues. Energy security utimatey means more than access to energy; it means access to cheap energy. And ike it or not, the Sun bet has the cheapest soar energy in the word, in vast quantities.» By Wiiam Pentand. Roger M Othman, Faciities Panning Department, Aramco, Mr.Othman spoke about the wind energy, and stated that the kingdom has a promising wend resources according the wind speed map that has been deveoped. Hani Zahran, Manager of the Nationa Earthquake & Vocano Centre, Saudi Geoogica Survey (SGS). Mr. Zahran spoke about the potentia geotherma sources in Saudi Arabia that may be used in energy production. He stressed that Renewabe energy resources can incude geotherma, soar and wind power, and that the Kingdom has many recent ava fieds with possiby significant geotherma resources. Saman A-Jishi, Vice Chairman of the Industria Committee, Counci of Saudi Chamber of Chamber of Commerce & Industry. Mr.A-Jishi introduced some observations on energy sector in ksa, moreover he stated that for SA to embark on renewabe energy sector we must pan to ensure from the onset that : Saudi buids competencies in terms of manufacturing the infrastructure ocay. Saudi Buids competencies to operate and maintain the infrastructure. Saudi invests in R&D to encourage innovation and technoogica growth and eadership. Saudi encourages rea growth in supporting industries. And concuded by the foowing suggested structure: He aso spoke about the aternative energy appications for the Kingdom s strategy: Soar: short-term depoyment and aso suitabe for remote ocations with imited grid access BOOT (Buid Own Operate and Transfer or any of its severa variations) Pubic Private Partnership (Foreign Technoogy Partners) Private sector foreign joint ventures If KSA wants to become a eader in CSP technoogies, this technoogy eadership coud be extended to CSP desaination Leadership in PV/CPV-based RO technoogy coud be buit on the current experience in KSA Dr. A-Suaiman concuded his presentation by isting the main piars that ead to the success of the nationa energy system in renewabe energy. Suggested Reguations: Nationa Grid to absorb excess production and credit private producers Carbon Credits to be appied Minimum oca content in manufacture of Infrastructure (eg 40% by vaue) Centra Authority to manage and govern a forms of energy generation

19 3 4 Suggested Incentives and Support System: Government Subsidy to equate cost of producing a forms of energy Specia funding to encourage investment in this sector R & D for Centers of Exceence Educationa Institutions to provide courses at a eves to make Saudi empoyabe Specia Industria Custer Program to deveop this sector Mr. Vahid Fotuhi, Director, BP Soar Midde East. Mr. Fotuhi, gave an outook about the demand growth in SA, continued saying «many peope question the abiity of soar energy to sove the probem?» And the answer is yes, the soar suppy can save up to 35- biion doars each year, in addition, the soar power wi be as cheap as natura gas in 10 years, and the steps that coud be taken to promote the soar power generation in KSA can be as foows: h Estabish soar IPP s Performance-driven, decreasing over time Benefit: Wi create jobs and hep reduce prices and improve expertise Day 2 - Session 3: Energy Conservation & Demand Management Moderator: H.E. Dr Saeh Aawaji, Chairman of the Board of Directors, Saudi Eectricity Company & Deputy Minister for Eectricity, Ministry of Water & Eectricity Pane: John Young, Director, CRA Internationa Abduhameed A-Nuaim, Customer Services Executive Director, Saudi Eectricity Company Dr Yousef Ayousef, Executive Director of Nationa Energy Efficiency Programme (NEEP), King Abduaziz City for Science & Technoogy (KACST) Lione Aubert, Director, Water Soutions, Schneider Eectric Pau F Browning, Vice President, Therma Products, Power & Water, GE H.E. Dr Saeh Aawaji, Deputy Minister for Eectricity, Ministry of Water & Eectricity. He started the session asking the paneists a group of questions: What are the most effective ways of promoting conservation and the efficiency energy use throughout vaue chain? How can we optimize consumption and cope with peak demand?, What shoud be the new demand management initiatives to be introduced? What is the atest in tariff poicy? How can we maximize efficiency? What energy saving technoogies are avaiabe? After that he introduced the speakers starting with John Young h Reform utiity prices Expand rate structures (peak/off-peak) Benefit: Wi promote energy savings and generate greater private-sector investment in power sector h Adopt stricter Green Buiding standards Enforce poicies that make buidings more sustainabe and ess wastefu Benefit: ess energy demand, ower strain on power gen infrastructure «The stone Age didn t end because peope ran out of stones» Mr.Fotuhi quoted Shaikh Ahmed Zaki Yamani, the former Saudi Oi minister Mr.Ahmad A-Khowaiter cosed the session thanking a the speakers for their remarkabe presentation and concuded the Q&A session saying: The capacity of each renewabe resource is different and each of them has certain cons, and the storage system wi pay a huge roe to sove them, on the other hand, the portfoio has to aways incude different resources

20 3 6 John Young, Director, CRA Internationa, he started his presentation with a demand anaysis summarized in the foowing: Tariffs have edged up sighty for industria and commercia customer, but are unikey to change much for residentia customers in the near term Popuation growth shows itte sign of sowing The economy appears to have weathered the recent downturn reasonaby we Power use per person is ikey to increase as the economy continues to grow and bring more eectrica goods into more homes So demand is ikey to continue on its inexorabe and steep -path The GCCI shoud provide some reserve transfer capacity, but everybody s peak demand periods are at the same time Abduhameed A-Nuaim, Customer Services Executive Director, Saudi Eectricity Company, he highighted the resuts of project management that have been impemented in SEC, stating that they were concentrating on raising the awareness of the pubic, and the importance of the demand side management programs for energy efficiency. Dr Yousef Ayousef, Executive Director of Nationa Energy Efficiency Programme (NEEP), (KACST), he spoke about the NEEP objectives, achievements, the power sector chaenges, and the nationa organizations invoved in heping to achieve our energy efficiency goas (visit Mr. Young commented that Introducing DSM programmes and new tariffs wi require action from a number of entities with certain roes: SEC : ECRA : Demand Anaysis Customer engagement Program management and evauation Providing incentives to customers Biing Tariff Approva for programmes Cost recovery and incentives for utiities Ministries: Lione Aubert, Director, Water Soutions, Schneider Eectric, Mr. Aubert gave an outook about Schneider eectric company after that he stated that the issue is the energy management not the power. Aso he mentioned some figures: %5 is the first step we can reach in saving energy consumption %30 is what shoud be our target. At ast he gave an exampe of integrated soutions in buidings using integrated technoogies. Pau F Browning, Vice President, Therma Products, Power & Water, GE. Mr. Browning stated that we need to baance between prosperity and sustainabiity, and with technoogy we can bring them together to the word, region, and to Saudi Arabia. After that he outined the chaenges and the opportunities of the sector: Standards Reguations Funding Socia Equity Mr. Young concuded saying that we need to work together with the customer foowing the winwin bases, and the actua benefits of individua DSM programmes or tariff changes wi obviousy vary, but they are rea. The Chaenges: Demand growth continues at ~ 7% Ceaner, affordabe energy needed Sharp oad curves create high peak demand Oder generating assets wi require repacement Increasing high-vaue crude oi monetization

21 3 8 The opportunities: DAY 3 Session 1 : Managing Soutions for Water Resources New power generation and T&D investment Renewabe and fue efficient therma Smarter grids and fexibe power More fexibe and efficient technoogies Diverse and efficient generation aternatives Moderator: Dr Adi Bushnak, Chairman, Bushnak Group & SWPF Keynote Presentation: H.E. Loay A Musaam, CEO, Nationa Water Company At the end he concuded the presentation stating: Discussion Paper: Sustainabe water and food security Prof. Waid Abdurahman, Managing Director, Miahona Over the next decade, fexibiity wi become a goba requirement. Technoogy investment enabes higher efficiency. Efficiency and diversity equas suppy-side conservation Dr.Saeh A-Awaji cosed the session asking «what is more effective for us to put our efforts in, doing awareness programs and educating peope, or working on doing a proper egisation to force peope to use energy efficienty? The speakers answered: Pane : Dr Mohammed A Saud, Deputy Minister for Water, Ministry of Water & Eectricity José Enrique Bofi, Director Midde East, aquaia Michae Chia, CEO, Keppe Integrated Engineering Hans Meuenbroek, Genera Manager, Metito Berinwasser H.E. Loay A Musaam, CEO, Nationa Water Company, H.E. A Musaam started his presentation addressing the water sector chaenges and the reasons of estabishing NWC and its objectives. Then he mentioned the benefit of the reuse concept in industries, commercia, pubic parks, andscaping agricuture summarized in the as foows: The best way is to educate peope about their benefit of using the energy efficienty Reduction in environment impact, reduces carbon footprint We shoud go in parae, the awareness and the tariff Heps in augmenting the potabe water suppy The Poicy shoud support the customer by not aowing the inefficient devises to be Heps in commercia sustainabiity of NWC imported. Protection of natura ground water resources (non-renewabe water resources) Dr. A-Awaji concuded saying, awareness is better than enforcement, at the same time there are decisions that have been made by government to enhance the power conservation and tariffs. There are ongoing coordination between ministry of W&E and other agencies in the power suppy sector in order to enforce the quaity of house appiances.

22 4 0 H.E. A Musaam aso stressed that the current water tariff needs to be reformed, and then presented the effect of water pricing poicies as: Optima Water tariffs and charges convey a signa to water users on the vaue of water and bring a change in water usage pattern In many countries the study has shown that the revision of tariff has encouraged conservation. Further this reduction in demand heps in reducing the growing infrastructure investments in water treatment pants, He continued, the annua water share per capita has decreased, as it was iters in 1950 and expected to be 1500 in 2015 and this shows the magnitude of the probem. Aso he expained the aarming rate of increase of the domestic demand from water in Saudi Arabia, which is going to exceed 7 biion m3 per year by 2050 forming a gap between the suppy and demand with 4000 biion in the coming 50 years, which is a serious aarming figure. Prof. Abdurahman ended the presentation dispaying the foowing Concusions & Recommendations At the end of the session Dr. Bushnak asked about tariff, as it is apparenty the most important issue and since there is no prospect of changing it soon, he asked about the options and the aternative pans that the NWC has for gaining resources H.E. A Musaam answered that there is a genera agreement that the subsidy shoud continue and NWC knows that this is a difficut task and a poitica issue and trying to continuousy communicate the message that without change they can t sustain performance. He added that possibe soutions incude introducing changes in tariff starting from industria sector. He aso mentioned that they are not depending entirey on tariff and hoping that 50% revenue wi come from TSE saes, they are aso aunching many initiatives to add vaue to the sharehoders and increase and save from production cost. Another question from the audience was about the soution of easing the infrastructure to utiity companies at a rate that wi not infuence the tariff, H.E. A Musaam answered that in an idea situation this woud be the utimate way to engage the private sector and benefit from the market forces to improve performance and maintain a reasonabe tariff, yet in the kingdom there are chaenges most important of which is the tariff because if the whoe risk is assigned to the private sector, it wi invest and recover its cost directy from the customer. He commented that what they offer is a combination where they can give responsibiity to the private sector but aso share the risk with them. He continued, going for the ease or concession option is the utimate soution, and this is the pan. Luxury in water use shoud be stopped soon A new comprehensive ega act have to announce a new water sector reguators, tariffs, community awareness and use shoud be spread More funding and an support to ocaize water technoogy, R&D, and for speciaized research centers. More invovement of the private sector in water services and technoogy Capacity buiding and training We have to dea with each region that has its own agricuture and water sources and popuation, we cannot generaize a uniform cuture and water poicy in a regions More financing and support to water We have to provide for aquifer storage & recovery in case water is cut out for any reason At the end he suggested to estabish a speciaized institute for water and food security to be a viabe country and to reach sustainabe water and food security. Dr Mohammed A Saud, Deputy Minister for Water, Ministry of Water & Eectricity, Starting by what he caed a sad story that happened in Saudi Arabia in the ast 28 years, Dr. A-Saud showed pictures of Laya ake which in 1980 was fu of water compared to its current competey dry situation. In the past it used to get fied by natura fow rain water which athough imited, was enough to baance the system as usage was based on necessary needs. In 1980, deveopment of agricuture started with wheat athough the area isn t suitabe for wheat crops. Prof. Waid Abdurahman, Managing Director, Miahona, The contents of Prof. Abdurahman s presentation described the goba water and food security, in Arab region, and in Saudi Arabia. He defined the meaning of the food & water security, and then mentioned that presenty there are 1.1 biion peope are acking the access to a safe drinking water in the goba scae, and 2.2 biion are acking the access to adequate sanitation, and miennium goa is to sash this ratio by He demonstrated sateite pictures to show the decining eves of underground water and showed what wi happen if we continue ike that. Ground water wi dry up competey in an area ike Wady Adawaser which had high-quaity water. Consequences incude decining ground water, degradation of ground water quaity and increasing of production cost. He then taked about the confict of usage between city and agricuture. He decared that if the case is eft as it is, agricutura wi go out of business soon because of ack of water and domestic water wi be affected.

23 4 2 He caed for the need to prioritize use of water, pace human usage before agricutura usage and readopt the od mode of importing most water-thirsty crops from outside. He then concuded by a powerfu statement saying that food security never means sef-production. José Enrique Bofi, Director Midde East, aquaia, Mr. Bofi spoke about the Management Soutions for Water Resources, describing the major areas of action which are: 1. System efficiency New infrastructure based mainy on Lowes Operation and Maintenance cost. Non Revenue Water eve set to minimum. Optimization of HR resources and personne incentivization 2. Tariff poices Towards cost refectivity To enforce customer payment is key to obtain pubic awareness Wide range of aternatives for the tariff structure In any case: Nonpayment shoud not be toerated 3. Demand management- Customer focus. Water poution contro and water pricing strategies were two of the main areas emphasized in the strategy. Water poution contro heps protecting the water sources and making them suitabe for treatment with comprehensive sewage treatment for waste water as Singapore is 100% connected through sewage systems. Poicy separate industria use from domestic use water. Efficient soid waste coection and disposa system prevent the contamination of our water course keeping rivers and drains cean. Reguations aso enforce industries onsite treatment. Measures and the whoe system approach managed to achieve sustainabe water suppy by increasing the two traditiona water sources into four with the extra recaim water and desainated water sources. The amount of recyced water is about 35% today and is being used by industries to aeviate the use of ground or imported water for portabe use. He concuded by stating that what Singapore has done on the software and hardware side put it on quite a sustainabe course to be abe to take care of our future deveopment. Hans Meuenbroek, Genera Manager, Metito Berinwasser Key importance shoud be given to pubic awareness campaigns. The customer shoud be the rea focus of the management activity. Effective and inteigent deaing with ow vaue uses of water. Enforcement of reguations through creative soutions Michae Chia, CEO, Keppe Integrated Engineering, According to Dr.Chia, achieving water sustainabiity was particuary important for Singapore considering scarcity in water resources, sma area and sma space for ground water forcing it to buy water from neighbors. Over the ast 40 years Singapore succeeded in buiding a sustainabe water suppy. For achieving a sustainabe water suppy, it is important to adopt a system approach to water management, create hoistic framework and set and impement appropriate strategies. It is aso important to incorporate demands and environmenta and water factors into the master pan and and use panning of the city from the start, to execute the pan it is important to have enough resource and budget to buid the necessary water and waste water infrastructure. An integra part is wiingness of peope to accept socia responsibiity of keeping water and waste cean, reducing demand, and adopting water recycing practices. Poicies and programs are of no use without buy-in from the pubic. Accordingy, the Singapore agencies have moved from pubishing and communicating to getting peope to participate in programs so they take ownership of environment and water resource. Mr. Meuenbroek presentation was about management soutions for water resources, he started his presentation giving a brief about the water and wastewater cost Management toos, commented that tariff is the main too for managing the cost and since it s ow so we need to find aternative. We shoud refect the cost of the actua water source either to use a cost formua that consists the cost of the water source (ground / see water) and the cost of transportation, or we can use the water index. After that Mr. Meuenbroek mentioned a ist of integrated management toos, as foows: Asset Management System inc. GIS Management Information System SCADA Monitoring Systems Metering, Data Mgmt. & Biing Laboratory Info Management System Leakage Contro (NRW) Cient Management Systems (Ca Centers) Water Resource Management (Modeing) Energy Management Human Capita Management (Training)

24 4 4 DAY 3 Session 2 : Produced Water : Waste or Resource? Moderator: Eng Lisa Henthorne, CTO & Senior Vice President, Water Standard & Past President, IDA Pane : Eng Wiiam Conner, Environmenta Engineering Consutant, Saudi Aramco Dr Samer Adham, Managing Director, Goba Water Sustainabiity Centre James P Wech, Director Shae Gas Soutions, Siemens Water Technoogies Eng Lisa Henthorne, CTO & Senior Vice President, Water Standard & Past President, IDA Eng. Lisa started by defining produced water of which the goba production is more than 250 miion bb/day and the percentage in some mature crude oi fieds can comprise as much as 98% of the production brought to the surface. Depending on ocation, reguation, feasibiity of options, cost, produced water is either sent to a disposa we, discharged at the surface, re-injected into the reservoir to maintain pressure fooding or reused at the surface. She then isted some of the chaenges of water treatment incuding high cost, contaminants which can create environmenta impacts upon discharge, difficuties of offshore treatment and the argey varied water quaity. Eng Wiiam Conner, Environmenta Engineering Consutant, Saudi Aramco Mr. Conner started by stating that Aramco represents an internationa exampe of responsiby handing the produced water as they reuse it entirey without causing any negative environmenta impact. Hence, Aramco s focus is on reusing produced water in other more vauabe ways and finding out how oi and water industries can hep in turning this water into a vauabe asset. Expaining to the audience the nature of Aramco s oi fieds, he said that they are bessed with oi reservoirs that are unike any other in the word with oi that is reasonaby easy to produce, very ow in water cut and requires very simpe oi recovery methods and enhancement technique. Aramco handes produced water by appying a simpe oi water separation, removing any additiona soids and re-injecting amost a the produced oi back into the oi fied for oi fied pressure maintenance. In an effort to become the eader in water conservation, a year ago Aramco took the initiative of forming a Water Conservation Committee to save ground water resources and other water resources in the kingdom through a mutipe discipinary committee across different departments incuding consuting services department, processes contro system department and the environmenta protection department a working in synergy to produce maximum resuts. She then taked about the environmenta drive for zero discharge which is putting a significant impact on oi and gas companies particuary those that are used to discharging the water on surface. This is because treatment before re-injection can be compex and expensive considering the increasingy stringent environmenta reguations and the uncertainty of the impact of re-injecting on a reservoir. She concuded by auding to the changing dynamics of produced water occurring around the word today. Aramco s oi fieds being far from the sea give produced water unique importance and causes Aramco to ook at a sources of water as a resource so as to reduce its use of nonrenewabe resources. For exampe, Aramco is currenty reusing 90% of sanitary water and is working on industria waste water reuse options. Aso, one subject of the first investigated by the group is how they process the oi. In the washing step for exampe, they are ooking into repacing the use of ground water with sea water or produced water. Mr. Conner provided more detais regarding the nature of the oi fieds and the process they currenty foow regarding their produced water and concuded by stressing again on the fact that they are ooking forward to any suggestion or ideas for getting more than one use of their produced water before they re-inject it for oi fied pressure maintenance.

25 4 6 Dr Samer Adham, Managing Director, Goba Water Sustainabiity Centre James P Wech, Director Shae Gas Soutions, Siemens Water Technoogies Dr. Adham gave an introduction about his company expaining that as an internationa energy company they are aso a producer of water in their upstream operations and a consumer of water in their downstream refinery operations carifying that water touches every segment of the oi and gas industry. He then expained that there is no one definition for produced water as it comes from different sources and a ot of it is site-specific with characteristics that are very variabe. He taked about the treatment chaenges incuding diverse contaminants, extreme conditions and robust process which ca for innovative treatment technoogies. He stated that the average barres of water for every barre of oi produced but the numbers goes up to 7 or higher depending on the age of the we which gobay amount to more than 210 miion barres per day. This water is mainy re-injected for reservoir pressure or disposed off but there are other opportunities coming up ike using it for enhanced oi recovery, cooing, steam generation, in agricuture for wetands, irrigation and ivestock watering, in dust contro and in aquifer recharge. There is no one standard soution for the reuse option of produced water as it depends on produced water quaity, end use and ocation. He spoke about the water recyce and re-use, and projects need to be evauated with respect to aternatives and residua vaues Projects need to be evauated for tangibe and intangibe benefits. For exampe, if produced water, fowback for municipa effuent can be recyced to some beneficia reuse, it is potentiay backing out the high cost to manufacture municipa desa water. In other countries, cheep sources of surface water are avaiabe but in the Kingdom it is ikey that expensive desa water is being back out as a suppy source to society. This needs to be considered as an intangibe cost benefit to the reuse project. If a treatment process appears commerciay justified, then the waste streams and secondary processes need to be evauated for inherent vaue. Is there incrementa benefit for treating the product water to a higher standard? Continue to evauate options unti a the vaue have been extracted from the waste and product steams and the next cheapest aternative for waste steams is disposa. Technoogy and innovation drive the economics to enhance recyce and reuse opportunities and extract additiona vaue from water reuse projects. Wide range of technoogies used in water treatment. He presented some technoogies avaiabe for treatment saying that a standard produced water treatment soution does not exist and depends on intended use. Government, industry and institutiona partners ike KAUST are a stakehoders that must invest and utimatey benefit from innovation. Management of produced water is evoving for many reasons ike for exampe the inabiity to discharge water back to reservoir due to reservoir pressure and tight reguations. Examine innovative ways for handing the treatment of produced water for recyce. The mission of Goba Water Sustainabiity Center ocated at Qatar Science & Technoogy Park (QSTP) working in coaborating with GE water and power on producing water treatment, deveoping innovative desaination techniques with ower costs and promoting conservation. In his fina remarks Dr. Adham mentioned that the word is facing serious shortage of water as water demand among a sectors wi be increased and reguatory framework is becoming more stringent. This causes major chaenge for industries as they have to manage water more effectivey and innovativey. Hence, produced water is a potentia aternative water source but needs innovative technoogies at affordabe cost.

26 4 8 DAY 3 Session 3 : Consumer Reations Concuding Open Pane Discussion Moderator: Jama Khashogji, Independent Journaist Pane : Dr Abdurahman A Ibrahim, Vice Governor for Consumers & Service Providers Affairs, Eectricity & Co-Generation Reguatory Authority (ECRA) Senior Representative, Nationa Water Company Khaid Agaa, Head of customer experience, Nationa Water Company Dr.As ad Abu Rizaiza, King Abduaziz University Dr. Abdu Rahman bin Mohammed A Ibrahim Deputy Governor for subscribers and service providers, Eectricity & Co-generation Reguatory Authority (ECRA) Dr. A Ibrahim start his presentation by pointing the important reationship between the company and the cient, within this reationship deivering eectricity to homes is what the cient ooks for regardess of any obstaces reated to the service provider. The citizen wants a reiabe service, high quaity and affordabe price. Furthermore, Dr Ibrahim expained the main tasks of the (ECRA) which incude the evauating the service provider and trying to narrow the existing gap between production and consumption. He aso expained, briefy the process by which (ECRA) receive and deas with customers compaints against the service provider. For (ECRA) is aso considered the main arbitrator between the service providers and the customers. In regards to compains according to the regions in the Kingdom the statistics are as foow: 35% from the Centra Region, 29% from the Western Region, 28% from the Southern region and 8% from the Eastern region. As for compains according to the provided service: Biing and tariffs 8%, Connectivity 27%, the remova of poes 19%, interruption of eectricity service 30%, the remova of sub-stations 2%, other 14% compaints. (ECRA) aso set rues and reguations to make sure that the customers get his rights. for exampe: No customers shoud endure interruption of eectricity service for more than 18 hours, furthermore, customers shoud have the services activated to them within 20 days from appying to it. Mr.Khaid A Aqaa, Head of Customer Experience, The Nationa Water Company Mr. A Aqaa started by defining the term «Customer Experience», and how the Nationa Water Company took into consideration the atest deveopments in this area and integrated them into the company strategy. And since the primary objective of the Nationa Water Company is to create a great customer experience to ensure the interaction between the company and the customers, so they began to use the foowing key aspects to measure the customer satisfactions: sensory & emotiona, financia, carifying that the percentage of customers deaing with the company based on sensory& emotiona aspect is 60%, whie 40% is based on the financia aspect. He continued saying that the customer experience strategy is inked with a the key strategies of the company, such as the customer service strategy, human resources strategy, information technoogy strategy, services strategy and the marketing strategy. Furthermore Mr.A Aqaa pointed out the customer experience approach as foows: Directing the focus on the cient Increasing the customer satisfaction Improving the pubic service, performance and efficiency Promoting the image and the competitive position in the water industry market, «the estabishment of new standards» Reducing the costs and increasing the revenues. Then he spoke about the progress in raising the number of the satisfied customers, expressing that in the foowing numbers according to the ast referendum resuts: The percentage of satisfied customers in March 2009 to August 2009 was 29% versus 25% for the non-satisfied.

27 5 0 And by the end of 2009 the percentage increased to be 89% satisfied customers, versus 3% non-satisfied. Mr.A Aqaa concuded his presentation highighting the quaity improvement in deaing with the customer probems (that take ess than 24 hours) that increased from 23% in 2009 to 68% in Mr. Jama Khashogji concuded the meeting by addressing questions to the speakers. Q: How much transparent the Nationa Water Company is, did the Dr. As ad Abu Raziza, King Abdu Aziz University in Jeddah Nationa Water Company announce one of the projects to citizens such as the sewerage network in Jeddah? Dr. Abu Raziza started his presentation asking a question Can we consider water as a commodity that can be traded for profit-taking? Or is it a human right?» which is the state duty to provide any citizen with the minimum amount of water that reserve his ife, and if any extra, it can then be returned to the companies use. He continued saying that the water price in Jeddah (due to the nearness to the distiation pant), shoudn t be compared to Riyadh that is 500 km far from the distiation pant. So, is the price cacuation wi remain the same? Dr. Asa ad concuded saying that there are many ways we can use to conserve water before turning to raise the water cost, for exampe: Repairing the water distribution network, as the percentage of the water eakage ranging from 10% to 40%, so the savings shoud come from repairing the network first. A: Mr. Khaid A Aga, there are severa channes in the Water Nationa Company to convey information to the citizen or interested, starting with papers, in the Media Centre beonging to the pubic reations department, we pubish company news incuding news of sewerage networks and house connections amost every week, in addition, the company has a website on the internet upoaded reguary and houry updated about the most important news in Water Nationa Company and its atest deveopments. Q: Eectricity Reguatory Authority is responsibe for reguating eectricity. Who is responsibe for reguating water? A: Mr. Khaid A Aga : As you know Water Nationa Company is under the responsibiity of the Ministry of Water and Eectricity and is headed by His Highness Dr. Abduah A Husain the minister of Water and Eectricity. Reducing the water used in the agricuture sector, as it consumes around 98% whie ony 2% is for the citizens consumption in some areas in the kingdom, therefore proportion of the agricutura sector shoud be reduced for the benefit of the citizen. Q: In case of dispute between a citizen and the company who is the judge? A: Mr. Khaid A Aga: I knew that Eectricity Authority has a future project in reguating water. But at present any decision in this regard is back to The Ministry of Water and Eectricity

28 5 2 The SWPF 2010 Recommendations Request the Supreme Economic Counci to speed up forming a comprehensive nationa system to move from demand driven poicy to demand management through comprehensive panning incentives and pubic awareness to reduce consumption of a uses of water, eectricity and energy ocay making it one of the main eements in the preparation of deveopment pans for cities & regiona panning. The current high growth rates require increasing water and eectricity production by 2032 to 3 times the present eve and this wi increase the demand on petroeum products to reach 8.3 miion barres equivaent in MoWE and Ministry of Finance are requested to expedite the deveopment and the impementation of an integrated system to achieve financia sustainabiity to be abe to provide the required investments for water & power services for future generations. They need urgenty to appy a mechanisms to ensure providing 500 biion Saudi Riyas required during the coming ten years to meet the oca needs for water & eectricity. We recommend the soutions to incude oca community funding mechanisms such as Water Trust Funds and Isamic bonds in addition to government budget aocations. The private sector shoud be encouraged to participate in this system the eectricity system and to enabe the private sector to invest in the eectricity industry. ECRA shoud aso deveop and announce a pan to move to a nationa smart grid to hep in the impementation of demand management and to stimuate investment in decentraized muti-sources of eectricity Request from the Nationa Water Company to deiver the safe treated reuse water to the industria and agricutura areas that surround cities. Request Saudi Arabian Agricutura Bank to support farms that use treated water efficienty and determine the minimum production efficiency of each cubic meter of water used that is worthy of government support for the crops that promote food security in order to stimuate the rationa use of water in agricutura production Request Ministry of Water and Eectricity to expedite the issuance of a comprehensive water aw that defines the priorities of use for different purposes and the minimum required efficiency of use and to estabish an independent government entity to oversee the impementation and activation of this aw and to measure and announce the quantity and quaity of the remaining water each year in the underground reservoirs and other water sources Encourage water use efficiency for municipa, agricutura and industria uses to achieve water security and socia justice and direct the generous government subsidies to the needy groups in society as we as to farms, and factories that use water as efficienty as possibe through restructuring the domestic and industria tariff and deveoping a tariffs for the agricutura use. Request Ministry of Petroeum to provide the types of fue required to achieve higher efficiency of fue usage and minimum environmenta impact as we as to identify and pubicize the minimum fue efficiency when buiding or updating existing generations & production pants and emphasizing the need to use word prices of fue used when trading-off between aternatives, regardess of the nature of the contract and to identify incentives provided by the state to increase the efficiency of energy use above the minimum eve Request King Abduah City for Atomic and Renewabe Energy (KA-CARE) to acceerate the deveopment and the impementation of a nationa system for sustainabe energy in order to maximize the amount of conserved oi and to maximize the contribution of the nationa human & industria capacity in maintaining the goba eadership of the targeted nationa technoogy sectors and maximize the deveopment of the nationa vaue-added chain and to decare the time frame for Saudis to reach the point of producing 25 % of eectricity and 50% of the desainated water using renewabe energy to attract investments and estabish the industria base necessary to achieve this. Request The Eectricity & Co-Generation Reguatory Authority (ECRA) to approve tariff eves that refect the true cost to enabe the Saudi Eectricity Company to expedite the impementation pan for restructuring the eectricity sector to be a competitive eectricity market, as has been stated in 9. Request MoWE and SWCC to provide strategic stockpie of drinking water under ground near desaination pants sufficient to cover the needs of the neighboring cities for a period of 180 days and not ess than 90 days, and the need to maintain water in the underground within the Kingdom as a natura reserve for future generations, and the need to stimuate investment to harvest rain water by ensuring its purchase,and encourage the Ministry of Water and Eectricity to deveop a water security in a regions of the Kingdom, and examine the water distribution mechanisms in situations of emergencies to identify and announce the aocated quantities for each citizen and resident and the ocation and method of deivery. 10. Request the Supreme Economic Counci to form a body of the concerned governmenta bodies to deveop a nationa integrated system for water security whie maintaining food security and monitor the impementation of its decisions to ensure achieving a sustainabe water & food security for future generations 11. Create a nationa fund to support water and food security projects, sustainabe energy programs, demand management and programs to support sma industries based on knowedge, innovation, R&D and training programs to deveop nationa capacity. 12. Request a concerned governmenta authorities and water and eectricity companies to impement projects in many areas of the Kingdom for producing water and eectricity using renewabe energy during the next decade, with preference given to nationa companies and industries in order to estabish an industria and commercia base for the use of renewabe energy

29 13. Request Ministry of Finance and Ministry of Water and Eectricity to move from a poicy of buiding and operating power pants and production at ow cost to buy the produced eectricity and water at the owest cost corresponding to the higher efficiency of energy use and ess impact on the environment and pubic heath, and request the Supreme Economic Counci to pubish their study resuts carried out by them to determine the vaue added to the economy from the nationa privatization program, with the purpose of consoidating the Kingdom s eadership in this regard and informing the citizens of its benefits. 14. Request the Ministry of Higher Education, King Abdu Aziz City for Science and Technoogy (KACST) and the research centers in the Saudi universities to decare the specific targets they want to achieve in the future in the strategic nationa pan for science and technoogy, and to ink the government support to target achievements and promote industria partnerships for goba competitiveness and urge internationa companies to support nationa research programs and technoogy 15. Request Saudi banks and the Counci of Saudi Chambers to urge businessmen to estabish partnerships and investment funds and partner with oca universities & research centers to deveop new inventions and nationa products for goba competition 16. Based on the rapid growth of eectric oads and the chaenge facing the eectricity sector to meet the growth, we must acceerate to take a the appropriate procedures to improve the efficiency of eectrica devices used (such as air conditioners, washing machines, etc.) 17. Request a reated governmenta agencies to cooperate with a A-Aghar group to compete the study prepared about prioritizing the programs needed to estabish and to activate a nationa integrated system that enabes the sectors of water, eectricity and renewabe energy of goba eadership and transforms the Kingdom into a knowedge-based economy 18. Request MOWE, Ministry of Agricuture, Ministry of Cuture and Ministry of Education to deveop TV and Radio cips to promote rationa use of water & eectricity consistent with Isamic vaues At the end, a the forum participants urged the organizers, the Ministry of Water and Eectricity, SWCC, KA-CARE, Nationa Water Company and the Saudi Eectricity Company to continue their efforts and support for future success of the forum during the coming years to become the source of knowedge, innovation and a goba competitiveness in the water, power and renewabe energy

30 Notes

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