Power Generation, Transmission & Distribution 2026 Comparisons

Governance and Regulation

The Ministry of Energy is responsible for the overall governance of the Energy Sector in the Kingdom of Saudi Arabia, developing strategies for the energy sector, supporting policies and regulations, and promoting measures for their implementation.

The Saudi Electricity Regulatory Authority (SERA) regulates the electricity sector, supervising licensing, monitoring licensed entities’ performance, and promoting fair competition, and has the key role of integrating the electricity sector within the Kingdom’s energy system to achieve the Saudi Vision 2030 objectives.

Procurement

Saudi Power Procurement Company (SPPC) conducts centralised procurement for generation and storage projects, and is responsible for preparing feasibility studies, tendering electricity generation projects and signing power purchase agreements with developer consortia.

Saudi Energy

Saudi Energy (the former Saudi Electricity Company, which is a listed Saudi company majority owned by the government) is the principal electricity utility in the Kingdom and operates across the electricity value chain, covering electricity generation, transmission networks, distribution networks, grid operation and reliability, energy storage initiatives, large-scale infrastructure investment and expansion projects.

Generation of Electricity

Generation is undertaken by Saudi Energy and independent power producers.

Transmission

Transmission is handled throughout the Kingdom by National Grid SA, a wholly owned subsidiary of Saudi Energy. The Grid Code defines the rules and regulations for accessing and using the transmission system of National Grid SA, detailing the obligations, responsibilities and accountabilities of all parties. The Grid Code further defines the minimum technical requirements for participants.

Distribution and Supply

Saudi Energy is the primary distributor throughout the Kingdom. Additionally, specialised utility and private companies distribute electricity to specific industrial cities, mega projects and private developments.

Storage

Storage is provided by independent providers contracting with SPPC.

Principle Laws and Regulations

The Electricity Law is the principal law governing the electricity sector in Saudi Arabia, covering generation, transmission, distribution, trading, retail sale, principal buyer activities, district cooling, and energy storage. The Electricity Law mandates the development of the sector’s structure to promote competition, requiring the Ministry of Energy, in coordination with relevant agencies, to develop, review, and amend the structuring plan of the electricity sector to promote fair competition, increase private sector participation, curtail monopoly, and facilitate the transition to an electricity market.

Supporting this primary legislation are several key implementing instruments, including the following.

• The Executive Regulations of the Electricity Law with regard to the Ministry’s Missions: These emphasise the Ministry of Energy’s responsibilities for policy-making and long-term planning, deciding the fuel/energy mix, international electricity trade and emergency powers, and for developing the sector’s structure in terms of unbundling, privatisation and competition.
• The Statutes of SERA: These establish SERA as an independent regulatory body with its own legal personality, defining its governance structure, board powers and tasks, including regulation of electricity services, issuing licences, setting tariffs, monitoring performance, ensuring supply security, protecting consumers and encouraging private sector investment.
• The Executive Regulations for SERA’s Tasks under the Electricity Law: These govern the functions of SERA, which include:
1. licensing procedures and conditions;
2. tariff regulation;
3. competition rules and market structure (including merger and acquisition approval, exclusive/monopoly rights);
4. study permits;
5. classification of nine licensable activities (generation, co-generation, transmission, distribution, trading, retail, principal buyer, district cooling, energy storage);
6. complaints; and
7. disputes and violations.

SERA requires accounting and regulatory separation between electricity activities (generation, transmission, distribution, and retail), while licence conditions impose requirements on the level of separation between electricity activities and between those activities and the other non-electricity businesses of a licensee.

The Law of Energy Supplies covers crude oil and its derivatives, natural gas and its liquids, hydrogen and electricity from all sources. It also specifies the requirement for a licence from the Ministry of Energy for all activities related to natural gas and hydrogen, including transport, processing, fractionation, gas purification, gathering, storage, local distribution, import/export, sale and construction, ownership and operation of gas and hydrogen facilities.

The Licensing Rules and Procedures set out the full licensing process for entities seeking a licence to operate within the Saudi power sector.

The Law of Petroleum and Petrochemical Products and its implementing regulations govern all petroleum and petrochemical operations, including refining, manufacturing, transport, storage, distribution, import/export, and sale of petroleum and petrochemical materials.

Public Authorities and State-Owned Entities

As noted above, the main public authorities and state-owned entities within the Saudi power sector are the Ministry of Energy, SERA, Saudi Energy, SPPC and National Grid SA.

Private-Sector Participation

The Electricity Law establishes a framework that promotes private sector participation, including foreign investment. One of the Law’s objectives is to promote private sector participation in the expansion of the electricity segment to enable it to achieve reasonable returns.

The Ministry of Energy is further mandated to develop the sector structure to enhance private sector engagement and facilitate privatisation.

Foreign Investment

Foreign investment in Saudi power projects must satisfy both the general investment regime and sector-specific approvals.

The Investment Law provides a single framework for local and foreign investors, with equal treatment under similar circumstances, protection against confiscation or direct or indirect expropriation except for public interest and fair compensation, the right to transfer funds into and out of the Kingdom without delay, and access to the courts or agreed alternative dispute resolution such as arbitration, mediation and conciliation.

Process

The process for a foreign investor involves:

• obtaining Ministry of Investment registration;
• establishing a Saudi entity;
• obtaining commercial registration and tax registration; and
• obtaining the relevant SERA licence, project-company approvals, grid-connection arrangements, environmental approvals and land rights.

Appeal

The Electricity Law provides that applicants whose licence applications are rejected or not decided within 30 business days may appeal before the Administrative Court.

Protections

The Electricity Law provides several protections for investors, including mandating the protection of licensees’ rights and interests by adopting a transparent, consistent, and non-discriminatory regulatory framework for electricity activities in the public and private sectors.

The Law also provides that SERA will protect the rights of project developers who do not hold a dominant position, including the right to achieve a return on their investment.

In practice, major power projects are commonly procured through competitive tendering processes and project-specific documents rather than ownership caps.

The principal law governing the sale of electricity assets and mergers is the Electricity Law, supplemented by the Executive Regulations for SERA’s Tasks under the Electricity Law.

The Electricity Law provides that a licensee may not, without obtaining SERA’s written permission:

• assign its licence or transfer ownership of licensed assets, whether through a sale, pledge, or any other means;
• merge or acquire the majority of shares or assets (with SERA having to be notified of any initial agreement on a merger); or
• acquire 5% or more of the shares of another licensee, or any lesser percentage that may create a dominant position.

SERA is responsible for detailing the merger approval process, requiring licensees to submit an application in the form, including:

• the identity of all persons with ownership exceeding 5% or any lesser percentage set by SERA;
• a description of the nature and commercial terms of the proposed transaction;
• background information on the parties, including annual revenues, asset values, total generation/transmission/distribution capacity, number of consumers served, and published financial reports; and
• a description of related electricity activities of the parties.

Purchasers of strategic power assets are expected to demonstrate financial standing, technical and operating competence, Grid Code competency, compliance with Saudi regulations, and the ability to preserve service reliability.

SERA may request additional information regarding the transaction’s impact on the electricity sector, including market shares, alternative supply sources and impact on suppliers, competitors and consumers.

Transactions will also be subject to the requirements of the Competition Law and the General Authority for Competition (GAC) Guidelines, as further considered in 2.4 Market Concentration Limits.

Oversight and Administration

Saudi Arabia has a dual-authority structure for overseeing power supply.

The Ministry of Energy is responsible for policy, long-term planning, determining the energy mix, international electricity trade, emergency powers, eminent domain decisions, and developing the sector’s structure.

SERA is responsible for licensing, tariff regulation, monitoring performance, ensuring supply security, protecting consumers, and encouraging private sector investment.

Generation Planning

The Electricity Law provides that the Ministry of Energy will develop a long-term plan for electricity activity in coordination with SERA, to include:

• determining the type of fuel available;
• determining the percentages of various energy sources in the optimum energy mix;
• interconnecting, reinforcing, and upgrading the electricity network and providing electricity to off-grid areas; and
• maintaining adequate reserve capacity at generation stations and ensuring sufficient capacity at transmission and distribution networks.

Planning responsibilities include load-growth projections, infrastructure requirements, fuel-supply planning, and exceptional situation preparedness.

SERA is responsible for ensuring safe, secure, reliable and highly efficient electricity supply. It must take the measures necessary to ensure additional resources for generating electricity if significant shortages in electricity supply are expected.

SERA’s Generation Expansion Planning Criteria require that sufficient long-term generation is available to meet demand at a specified reliability level and lowest possible cost, with coordination between SPPC, National Grid SA and producers.

There have been several recent material changes in law and regulation regarding the power sector in the Kingdom of Saudi Arabia, as follows.

• The Petroleum and Petrochemical Materials Law replaced the former Law of Trade in Petroleum Products and now requires all petroleum and petrochemical activities (sale, transport, storage, distribution, import, export, packaging, and processing) to be licensed by the Ministry of Energy. It aims to ensure supply security, strengthen oversight, raise compliance, and support Vision 2030 energy objectives.
• The Executive Regulations of the Petroleum and Petrochemical Materials Law detail licensing conditions, feasibility study requirements, financial reporting obligations, import/export approval requirements, and a graduated violations/penalties schedule.
• The updated Investment Law and its implementing regulations replace the older foreign investment model with broader investor rights and a registration and screening framework.

SERA has introduced a number of regulatory updates and guidance documents, including the following.

• The Guide to Electricity Service Level Standards (Third Edition): SERA issued an updated guide establishing nine Guaranteed Standards, providing automatic financial compensation to consumers when service levels are not met, without requiring a complaint to be filed.
• Energy Storage was added as a licensed electricity activity: The Executive Regulations were amended to add Energy Storage as the ninth licensable electricity activity requiring a dedicated licence before construction or operation.
• The Electricity Service Provision Manual providing guidance to regulate the relationship between service providers and consumers.
• The Transmission Use-of-System-Charging Methodology.
• The Energy Charging Rules.

National Renewable Programme

Saudia Arabia’s National Renewable Energy Programme is a Vision 2030 initiative designed to diversify the electricity sector, replace liquid fuels with gas and renewables, and move towards an electricity balance in which renewables make up around 50% by 2030. The programme focuses on achieving the optimal energy mix to produce electricity, promoting the renewable projects, increasing the number of competing companies in the sector and providing a plan that encourages investment. With emphasis on facilitating the necessary permits and driving the tendering processes for large-scale renewable energy projects, the programme aims to establish partnerships with the private sector in increase renewable generation capacity.

Net Zero Emissions

Complementing the National Renewable Energy Programme, Saudi Energy aims to achieve Net Zero emissions by 2050, managing the integration of renewable energy into the national grid and providing increased flexibility through the development of large-scale battery storage solutions to support peak management and enhance system resilience.

Liquid Fuel Displacement Programme

The Liquid Fuel Displacement Programme aims to displace diesel, crude oil and other liquid fuels currently burnt for power generation, water desalination, industrial manufacturing and agriculture by increasing reliance on natural gas and renewable energy. The programme is driving the expansion of gas transmission and connections with the national grid.

Transition to Gas and Renewables

Saudi Arabia’s policy direction is clear. The Kingdom aims to replace its dependence on liquid fuels, expanding gas and renewables, maximising the renewables share in the Kingdom under its National Renewable Energy Programme.

Notable achievements during the programme include:

• Phase 1 - the Saaka solar PV project and the Dumat Al-Jandal wind project, with a combined capacity of 700 MW;
• Phase 2 - the National Renewable Energy Programme, consisting of seven solar PV projects with an aggregate capacity of 2,970 MW; and
• Phase 3 - four solar PV projects, with a combined capacity of 1,200 MW.

Low Renewable Tariffs

Saudi Arabia’s procurement programme has produced very low renewable tariffs. Recent PPAs and BESS tenders have demonstrated that private and international sponsors are contributing significantly to the Saudi energy sector.

Location

Saudi Arabia’s geographical location and climate make renewables economically feasible, supporting the directive for diversification of energy sources. The country is ideally positioned to play a strategic role in regional interconnection, emergency support and potential future power trading with the GCC. National Grid SA recognises this opportunity, stating that it is investing in regional and international interconnection projects and leveraging Saudi Arabia’s strategic geographical position.

Electricity Market

The Saudi Arabia electricity market is characterised by a central procurement model through SPPC, also known as the Principal Buyer, responsible for procuring electricity, developing generation projects and negotiating power purchase agreements.

Generation and network services are regulated through SERA licences and tariff/revenue frameworks.

The Electricity Service Level Standards Guaranteed Standards aims to incentivise service providers to achieve a high level of quality of service, and provides guidance on compensation for consumers if service providers fail to comply with the standards specified in the guidance.

Capacity Market

There is no formal capacity market. Capacity levels are subject to the specific project arrangements, power purchase agreements and storage service agreements.

High-Load Consumers

Electricity supply to high-load consumers, such as data centres, petrochemical, mining and water desalination facilities, is controlled through regulated connection processes and tariff categories, including SERA consumption tariff categories for cloud computing and intensive electricity consumption tariffs for qualifying industrial, commercial and agricultural facilities.

The Rules, Controls, and Executive Procedures for High Intensity Electricity Consumption Tariff provide governance mechanisms that specify qualification conditions, controls and fees for consumption sectors related to high electricity consumption.

The GCC Interconnection Authority Grid links the GCC transmission networks and uses a back-to-back HVDC station to integrate the 50Hz GCIAA Grid with Saudi Arabia’s 60Hz grid, allowing seamless integration and stable power exchange. To ensure reliability, the overhead lines are designed with double circuits, allowing for continuous power flow even if one circuit experiences a fault. GCCIA materials describe the interconnection as supporting reliability, capacity sharing, fuel and operating savings, power trading and reduced outage risk.

Interconnection activity currently focuses on system security, emergency support and structure, and providing cross border exchange rather than merchant trading.

Pricing is determined by the relevant interconnection and power exchange or bilaterial arrangements and regulatory approvals, rather than by a domestic wholesale market.

The Ministry of Energy’s Optimum Energy Mix aims to increase generation efficiency and lower costs through the diversification of energy sources used to produce electricity, moving from an electricity supply mix, which remains weighted to natural gas and oil, to an energy mix comprised of 50% renewables and 50% gas, by 2030.

The Energy Allocation Committee approves the criteria for allocating energy to various consumption sectors.

As of April 2026, an Ember Energy profile identified the following mix of generation.

• Natural gas – 63.3%
• Fossil fuels, largely oil – 34.5%
• Solar – 1.8%
• Wind – 0.4%

Market concentration is regulated through:

• the Competition Law and its implementing regulations;
• guidance issued by the GAC; and
• the licensing of entities controlled by SERA.

The Competition Law and its implementing regulations, which are governed by the GAC, apply to all entities operating in the Kingdom, as well as any foreign entities that directly impact fair competition in the Saudi market.

The GAC’s responsibilities in the energy sector include ensuring market integrity and blocking any monopoly. The GAC’s Economic Concentration Review Guidelines outline the circumstances applicable when an economic concentration must be notified to the GAC, describe the jurisdiction of the law over economic concentrations, the competition test that the GAC will apply in assessing whether or not an economic concentration may be anti-competitive, and whether the GAC may approve the economic concentration, block the economic concentration, or approve it subject to certain conditions.

The Competition Law authorises the GAC to conduct inquiries, search premises to obtain copies of documents, files and data, interview employees, gather evidence of company activities and competition levels, and record violations of the Competition Law. The GAC may also request authorities to provide reports on entities operating in the market. The GAC Guidelines also emphasise that concentrations are assessed for actual or potential impacts on markets.

The Competition Law provides for a Committee to adjudicate violations of the Law and its implementing regulations. Penalties may be levied not exceeding 10% of the total value of the sales subject of the violation, or a fine not exceeding SAR10,000,000 if it is not feasible to estimate annual sales. If the violator repeats the violation, the Committee may double the fine for the first violation.

The violator may be required to rectify the violation within a specified period. Alternatively, the violator may be required to dispose of certain assets, pay daily fines, or close its entity for up to 30 days in the case of prolonged violations.

The construction and operation of generation facilities is governed by a combination of electricity, construction, land, environmental laws, and individual project contract terms and conditions.

The Electricity Law establishes that no electricity activity (including generation) may be carried out without a licence from SERA.

SERA classifies generation and co-generation as licensable activities requiring a licence before commencing construction and throughout the period of operation.

The Regulatory Framework for Renewable Energy Generation for Self-Consumption regulates self-generation from renewable sources and requires a study permit and licence from SERA.

The Grid Code is the key technical reference defining obligations for users of the transmission system, and transmission service providers, including connection, planning, operating, scheduling, dispatch, data exchange and metering requirements.

Generation projects usually require environmental classification and approvals from the National Center for Environmental Compliance (NCEC) to determine, estimate and evaluate the environmental impact of a classified activity.

Building and occupancy approvals are required from the local municipality using the Balady municipal services portal to apply for building licences related to the applicant’s activities and proposed use of a site.

Construction must comply with the requirements of the Building Code.

The land where the generation facility is to be constructed is usually subject to particular rights relating to ownership and land use.

The applicable power purchase agreement (or storage and offtake agreements, as the case may be) will detail specific terms and conditions applicable to the construction and operation of the plant.

The regulatory process for constructing and operating power generation facilities involves two principal stages.

Study Permit

First, a Study Permit must be obtained from SERA before commencing any preparatory work including planning and feasibility studies.

SERA issues the study permit within ten business days after the date when the applicant’s information and data are complete.

The study permit is valid for one calendar year and is renewable.

Licensing

A licence must be obtained from SERA before commencing any construction activities and must be obtained at least 30 working days before the construction start date.

SERA intends to issue its decision to grant or refuse the licence within 30 business days from the date the application is complete. This can be delayed due to technical, environmental, municipal, land and grid workstreams.

Terms and Conditions

The Executive Regulations for SERA’s Tasks under the Electricity Law include conditions covering:

• the licence term and effectiveness, taking into account the design life of facilities;
• the scope of licensed electricity activities and the geographical area;
• prohibited activities, including restrictions on the licensee’s ownership or involvement in other electricity businesses;
• a requirement to notify SERA and obtain prior written approval for any proposed merger, acquisition, or change of control;
• the level of separation between electricity activities and other activities for accounting and regulatory purposes;
• obligations to provide information and data requested by SERA;
• compliance with relevant laws, codes, standards, and SERA’s decisions; and
• the terms and conditions of connection agreements on specified terms.

Generation/co-generation licences have a duration of 25 years.

Amendment

A licensee may apply to SERA to amend a licence condition.

Amendments may require review and approval from relevant authorities including the National Grid SA, NCEC and the relevant municipality for building permit issues.

Appeal

Appeals against SERA’s licensing decision may be submitted within 15 days of notification of the decision.

If the matter remains unresolved, an appeal may be filed with the Administrative Court within 60 days.

Licensing

The Electricity Law provides that a licensee may acquire land suitable for a project or for related purposes, in accordance with the Law of Eminent Domain and Temporary Taking of Property” and its implementing regulations.

The implementing regulations provide that expropriation of real property shall be approved for the benefit of public utilities and services, including electricity.

A private generation developer would usually secure land by ownership, lease, government allocation or industrial city arrangements, depending on whether the project is procured by SPPC, located on government land, developed within an industrial city or is constructed for self-consumption on its existing premises. When the land is typically leased by a government entity to the project company, the eminent domain issues are handled at the government level and the private sector is not usually involved in any process that is required to obtain the rights to use the land.

Compensation

The Basic Law of Governance also protects private property and provides that a property owner may not be deprived of property except for public interest and fair compensation.

The Law of Eminent Domain and Temporary Taking of Property establishes principles for fair compensation for expropriated property based on market value.

The Electricity Law and the Executive Regulations for SERA’s Tasks under the Electricity Law address decommissioning through the licensing framework.

Under the Licensing Rules and Procedures, the licence expiry for each station is determined based on either:

• the licence term expiry date (as specified in the licence); or
• the design life (useful life) of the last unit in the station expected to leave service.

If the design life exceeds the licence expiry date, the licence expiry date prevails. If the design life ends before the licence expiry date, the design life date is used.

SERA retains the authority to impose sanctions and/or requirements when a licensee fails to carry out the licensed activity, to ensure that service is not interrupted.

There is no explicit statutory obligation under the Electricity Law to fund decommissioning over the physical life of the facility, though licence conditions may address end-of-life obligations.

Aside from the early power and water I(W)PPs at the turn of the century, projects involving private sector participation typically follow the build-own-operate (BOO) model, meaning that the project company is allocated the responsibility of decommissioning the plant upon expiry of the PPA and the offtake agreements will set out the obligations of the project company in connection with decommissioning, which will include an obligation to comply with applicable laws.

The NCEC regulates potential environmental impact and may require corrective and rehabilitation requirements in connection with decommissioning of the plant.

Where building and facility structures are demolished or materially altered, municipal requirements may include an electronic demolition permit, building permit and occupancy certificate processes through Balady.

The principal laws governing the ownership, construction and operation of transmission lines are similar to the requirements for generation facilities. While there has been a recent trend towards the use of the build-own-operate-transfer model in the procurement of certain transmission infrastructure in the Kingdom (eg, water pipelines), typically it will be the responsibility of National Grid SA to procure power transmission infrastructure, which it will also own, and it will generally employ contractors to undertake the development of this infrastructure.

Construction

The Electricity Law requires a transmission licence before constructing any part of a transmission system or transmitting electricity.

SERA classifies transmission as a licensable activity requiring a licence before commencing construction and throughout the period of operation.

Environmental reviews are required as part of the licence application process.

The Grid Code specifies basic principles and establishes the technical, design and operational conditions for connecting and using the Grid, and provides a framework for interaction in relation to the planning and development of the transmission system.

Operation

The Grid Code covers a range of operational matters including operational demand forecasting, generation and transmission maintenance planning, providing and managing system support services, operational liaison and coordination of safety.

User responsibilities and obligations for scheduling and dispatch of generating units are detailed in the Grid Code, which sets out the procedure for supplying timely and accurate information by users to the Transmission Service Provider.

The Grid Code further sets out the minimum technical, design and operational criteria relating to metering and data collection equipment and installations.

Storage

Storage associated with transmission is becoming increasingly important, with projects being procured with independent storage providers. The Grid Code includes provisions relating to battery storage systems and inverter-based resources.

Environmental Review

An environmental may be required where the relevant activity is classified by NCEC as having an environment impact.

The regulatory process for approval to construct and operate transmission lines is similar to the process for generation with an additional requirement set out in the Licensing Rules and Procedures that the transmission licensee must submit its future plans for transmission activity for the next five and ten years to SERA for approval.

SERA’s approval of these plans constitutes a study permit for all projects within the approved plans, although any subsequent changes to the plans require SERA’s further approval.

A transmission licence has a duration of 25 years.

Additional approvals are required as for the generation projects outlined at Section 3.2 Obtaining Approvals to Construct and Operate Generation Facilities.

Terms and Conditions

The typical terms and conditions imposed on transmission licences are similar to those described for generation licences.

Additionally, the transmission licensee must submit and comply with a Transmission Code (approved by SERA) and ensure that all persons connected to or using its system comply with the code.

The eminent domain framework for transmission is similar to that for generation facilities outlined at Section 3.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Generation Facilities.

Monopolies

SERA may permit a licensed electricity activity to be exclusive for a specific purpose and geographical area, either for the full licence term or part thereof.

National Grid SA is the sole entity responsible for electricity transmission to all customer segments nationwide, operating an interconnected network of approximately 99,000 circuit kilometres of transmission network covering more than 13,000 cities and villages.

Private parties may construct project-specific interconnection or dedicated facilities, but these are usually integrated through National Grid SA and the relevant service provider and are subject to SERA-approved technical requirements rather than operating as a competing transmission system.

Charges

Transmission charges are established through SERA’s tariff-setting mechanism. SERA periodically reviews the electricity tariff for all consumer categories to reflect actual cost based on energy prices approved by the competent agency, publishing tariffs and electrical service connection fees.

The Electricity Law provides that the SERA’s Regulations should detail the tariff review process, including principles of enabling efficient operation, full cost recovery, reasonable return on invested capital, providing incentives for continuous improvement, and non-discrimination between consumer categories.

Terms of Service

The Grid Code provides the technical terms for connection and use of the transmission system.

Licences and connection agreements cover the relevant commercial and operational terms and conditions.

Open Access

The transmission service is provided on an open-access and non-discriminatory basis.

The Electricity Law provides that a licensee may use a transmission or distribution network owned by another licensee for a fee without discrimination.

The Executive Regulations for SERA’s Tasks under the Electricity Law state that the transmission licensee must provide connection or system use to any person who requests it, and that connection offers must be clear, transparent, objective, and non-discriminatory. Open and non-discriminatory access must be established for any licensee or large consumer.

In practice, access depends on SERA licensing, connections studies, network capacity, compliance with technical standards, metering, environmental and land approvals, and negotiation of the relevance connection or service agreements.

Principal Laws

The Electricity Law requires a service provider to obtain a distribution licence before constructing any part of a distribution system or distributing electricity to consumers.

SERA classifies distribution as a licensable activity requiring a licence before commencing construction and throughout the operation period, including distribution to consumers within the authorised geographic area.

Saudi Arabia’s Distribution Code defines the rules and regulations for participants accessing and using the transmission system of the grid.

Approvals

The regulatory process for obtaining approvals to construct and operate electricity distribution mirrors that for transmission facilities.

The distribution licensee submits its five- and ten-year plans to SERA using the forms prescribed in the Licensing Rules and Procedures.

SERA’s approval of these plans serves as the study permit for all projects listed in the application.

SERA grants the licence directly.

Timelines

SERA should issue the study permit within ten business days of the application and the licence within 30 business days of a complete application.

A distribution licence has a duration of 25 years.

Public Participation

Public hearings are not mandatory. SERA may seek public input at its discretion.

Appeals

Decisions may be appealed to the Administrative Court.

Terms and Conditions

Licence conditions for construction and operations of electricity distribution facilities are similar as for generation and transmission licences.

Distribution approvals typically require compliance with the licensed service area, the Distribution Code, connection standards, metering arrangements, service-quality rules, consumer-protection obligations, tariff categories, outage and complaints procedures, safety standards and environmental requirements.

Timelines

A distribution licence has a term of 25 years.

Amendment

To amend a condition, the licensee applies to SERA which decides on the proposed amendment within 30 business days.

Appeals

An appeal against a rejected licence application may be filed within 15 days, followed by an appeal to the Administrative Court within 60 days.

Amendments

A licensee may apply to SERA to amend a licence condition. Amendments may require review and approval from relevant authorities including the National Grid SA, NCEC and the relevant municipality for building permit issues.

The eminent domain framework requirements to construct and operate electricity distribution facilities are similar to those as for generation and transmission.

Developers should address access rights for substations, cables, metres and maintenance corridors at the land acquisition and master planning stage. Subsequent changes can affect permits and consumer connection dates.

The monopoly rights requirements for electricity distribution entities are similar to those as for generation and transmission.

SERA may grant exclusivity for a specific purpose and geographic area.

A licensee may not claim exclusive rights unless expressly stated in the licence.

Charges

SERA is authorised to set distribution tariffs. Rates are derived using a cost-of-service methodology, as set out in the Saudi Electricity Regulatory Authority General Framework and Methodology for Determining Required Revenues, while service quality is governed by the Guide to Electricity Service Level Standards, which establishes nine Guaranteed Standards with automatic consumer compensation for non-compliance.

Appeal

Decisions on rates and terms of service may be appealed to the Administrative Court.

Consumer Complaints

Licensees must also maintain consumer complaint procedures approved by SERA, and consumers may escalate unresolved complaints directly to SERA.

SERA’s consumer protection process allows complaints to be escalated to SERA in circumstances where the service provider closes a complaint without resolution.