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Saudi Aramco: PublicSaudi Aramco: Public
Saudi Quality Council
Jeddah, May 19th 2016
Electrical Equipment Testing: Feasibility & Future Perspective
Saudi Aramco: Public2
Burning Desire
Opportunities in the MENA/GCC
Testing Lab Services & Features
Differentiation Factors
Risks & Mitigations
GCC Electrical Equip Lab
Outline
Saudi Aramco: PublicSaudi Aramco: Public
285 Fatalities in 2 yrs in Fire Incidents
SR 340 millions Damages
60% is originated by electric causes
Substandard/Fraud Electrical Devices
Power Failures & Losses
Safety
Saudi Aramco: PublicSaudi Aramco: Public
80% of Electric Devices are Counterfeit
33% of total Incidents’ causes
SR 41Bn Losses to KSA Economy
Customs: 125.5m Counterfeit Items
(2013)
Value: SR 8.6Bn, with 129% increase
Counterfeits
Saudi Aramco: Public
Cost of Reliability
US: $ 119 Bn/YearEPRI
US: $ 150-400 Bn/YearDOE
US: $ 79 Bn/YearBerkeley Lab
TANGIBLE
NONTANGIBLE
Saudi Aramco: Public
MENA’s Power Growth
Manufacturing
Knowledge Economy
Quality Safety Efficiency
Renewable Smart Grids & DC
Saudi Aramco: Public
Electric Utilities Oil & Gas
Water Desalination
Petrochemicals
R & DRenewable
7
Huge Market (Growth rate 8-10%)
Growing Electrical Equip Factories
50% Commodities not Manufactured
Assembling vs. Manufacturing
30% Local Share of Purchase Volume
Obsolescence/Aging Challenges
7
Opportunities in GCC Countries
Saudi Aramco: Public
Testing Investigation Calibration Training
and R&D
Transformers
Switchgears
Cables
Towers
Insulators
Renewable
DC Systems
UPS Systems
Efficiency
Transformers
Switchgears
Cables
Towers
Insulators
Renewable
DC Systems
UPS Systems
Efficiency
Disputes
Arbitration
Field
Design
Quality
Disputes
Arbitration
Field
Design
Quality
QA
O&M
PMT
Inspection
QA
O&M
PMT
Inspection
Training
Researches:
Environment
New Equip
Arc Flash
Training
Researches:
Environment
New Equip
Arc Flash
8
Lab Services Scope
Saudi Aramco: Public
Design and Feasibility
9GCC Electrical Equipment Testing Laboratory
DescriptionInvestment
[%]
Operation
[%]
Revenues
[%]
Margin
[%]
High Voltage laboratory 16 % 25 % 26 % 25 %
High Power laboratory 63 % 49 % 56 % 62%
Low Voltage laboratory 4 % 18 % 18 % 18 %
General infrastructure 17 % 8 % 0 -3 %
TOTAL 100 % 4.4 % 11.4 % 7.0 %
Saudi Aramco: Public10
Lab Services Scope
Maximum Rated Values
Main equipment Standard [kV] [A] / [MVA] SC [kA]
HV circuit breakers IEC 62271-100 420 4000 A 63
HV switchgear IEC 62271-203 420 4000 A 63
MV circuit breakers IEC 62271-100 36 3150 A 31.5
MV switchgears IEC 62271-200 36 3150 A 31.5
MV Load Break switches IEC 62271-103 36 1200 A 31.5
Prefabricated substations IEC 62271-202 36 3 MVA 40
LV switchgears IEC 61439 0.69 6300 A 100
MV cables IEC 60502 36 550 A 43
HV cables IEC 60840/62067 420 2600 A 63
Distribution transformers IEC 60076 / IEEE 36 20 MVA -
Power transformers IEC 60076 / IEEE 145 100 MVA -
Power transformers IEC 60076 / IEEE 420 650 MVA -
Saudi Aramco: Public
Benefits to the GCC Countries
Improve Design Quality
Create Knowledge Economy
Localize Manufacturing
Create High-Skilled Jobs
Promote Applied R&D
Offering Localized Services
11
Saudi Aramco: Public
Quality, Time & Cost
Retrofit Solutions for Obsolescence
Failure Investigations/Studies
High-Class Technical Training
Specialized/Localized Support
12
Benefits to Manufacturers & Users
Saudi Aramco: Public
Ownership Model
13
13
ISO-17025.: "the laboratory should be able to demonstrate that it is impartial and that it and its
personnel are free from any undue commercial, financial and other pressures which might influence
their technical judgment. The testing or calibration laboratory should not engage in any activities that
may endanger the trust in its independence of judgment and integrity in relation to its testing or
calibration activities."
ISO-17025.: "the laboratory should be able to demonstrate that it is impartial and that it and its
personnel are free from any undue commercial, financial and other pressures which might influence
their technical judgment. The testing or calibration laboratory should not engage in any activities that
may endanger the trust in its independence of judgment and integrity in relation to its testing or
calibration activities."
CESI CPRI KEMA KERI Xihari
Country Italy India Netherland S. Korea China
StakeholdersPower Production & Utility companies, research Institutes
Government of India, Ministry
of Power
PowerProduction and Utility companies
Government sponsoredInstitute
Manufacturers,
Government assigned
13
Saudi Aramco: Public
Shareholder Participation
Shareholder Share
SEC 25 %
Saudi Aramco 20 %
PIF 20%
Dh Techno-valley KFUPM 15%
Mutabagah 5%
GCCIA 5%
Al-Fanar 4%
ACWA Power 2.5%
Saudi Transformers 2.5%
SEMSC 1%
Total 100%
Supported by:
14
15
Saudi Aramco: Public
Differentiation Factors
Favorable Geo-Economics
Strategic Shareholders
Strategic Location
International Recognition
Specialty (HV, HP, LV)
Regulations (GSO/SASO)
15
Saudi Aramco: Public
1. Company Established
2. 10 Companies Shareholders
3. Board is Formed
4. Land is reserved by Modon
5. Four Potential International Partners
6. Gov & Organizational Support
16
Progress Update
17
Saudi Aramco: Public
Reputation
Project Execution
WTO:
Subsidies & Countervailing
Measures (SCM)
Location WTO:
Technical Barrier to
Trade (TBT)
Impact
Like
ho
od
Know HowUtility
Risks & Mitigations
Financial Stand
Regulations
Know-HowRegulations Finance Management
Saudi Aramco: Public
What are your
Advantages?
Saudi Aramco: PublicSaudi Aramco: Public
THANKS
Saudi Aramco: Public20
Lab Features
Trust &
Confidence
Quality &
integrity
Capability &
Delivery
Innovation
R&D
Saudi Aramco: Public
Industrialization
Urbanization
Saudi Aramco: Public
Saudi Aramco: Public
The Strategy Diamond
ArenasArenas
StagingStaging
Differentiators
Differentiators
Vehicles
Vehicles
Economic LogicEconomic Logic
Saudi Aramco: Public
2000 2015Growth
(%)2025
Annual
Growth
(%)
Generation
capacity [GW] 26 69 168% 110 6.8%
Renewable
capacity [GW] *
starting 2017
- - - 9.5 100
Total peak load
[GW]22 62 187% 97 7.3%
Transmission
network
[km-circular]
29,631 67,446 128% 104,423 5.6%
Distribution
network
[km-circular]
111,129 276,901 149% 847,902 6.3%
Saudi Aramco: Public
Investigation&
Arbitration
Testing
&
Certification
Calibration
R&D
Saudi Aramco: Public
1
Reduce Time & Cost of
Testing
2
Improvement of
Design Quality
3
Creation of
Knowledge Economy
4Localization of
Manufacturing
5
Creation of High Skilled jobs
6Motivating Investment in Electrical Infrastructure
Saudi Aramco: Public
GCC Electrical Equipment
Testing Laboratory
Saleh Al AmriCIGRE GCC Power 2015, Jeddah
29
Saudi Aramco: Public 29
Possible Synergy with EIC
1
2
3
4
45
6
7
8
9
4
10
Community Entry Boulevard
New Rail
Spur
10
Acce
ss R
oa
d (
Gh
on
an)
3
2
4
5
6
1Light Industrial
Medium Industrial
Heavy Industrial
Logistics
Foundries
Drilling Fluids
7
8
Commercial
Labor Accommodation
Public
Training Institute9
1
0
Saudi Aramco: Public
Background – Feasibility Analysis
30GCC Electrical Equipment Testing Laboratory
Company Participation
SEC 1,500,000 SR
ECRA 500,000 SR
Saudi Transformer Company 100,000 SR
Saudi Services For Electro Mechanic
Works (SSEM)
300,000 SR
ABB Electrical Industries Co. Ltd. 50,000 SR
Alfanar 300,000 SR
Riyadh Cables 200,000 SR
AREVA 100,000 SR
TOTAL 3,050,000 SR
Conduct by: &
Saudi Aramco: Public
1) Background – Development Committee
31GCC Electrical Equipment Testing Laboratory
Name Affiliation Address
Dr. Abdullah Al-Shehri Governor ECRA
Eng. Saleh Al-Sohaibani Executive Director, Engineering & Projects SEC
Dr. Najeeb Al-Jamee Director, Electricity & Water Division GCC
Eng. Ahmad N. Swaidan President, Administrative Sector Saudi Transformer Company
Eng. Waleed A. Al-Rumaih Senior Consultant, Energy Studies (KAPSARC)
Eng. Awadh Aldigs Research & Development ManagerABB Electrical Industries Co.
Ltd.
Eng. Abdulla A. Hasan Head Substations Maintenance GCCIA
Eng. Majed Al Hamrani Electrical Systems DivisionConsulting Services, Saudi
Aramco
Dr. Nabih Al Saati Technical Executive Director Riyadh Cables
Dr. Luai Al-Hadhrami Director, Center for Engineering Research KFUPM
Eng. Khaled Al-Soufi Research Engineer KFUPM
Saudi Aramco: Public
Shareholder Participation
Shareholder Share
SEC 25 %
Saudi Aramco 20 %
PIF 20%
Dh Techno-valley KFUPM 15%
Mutabagah 5%
GCCIA 5%
Al-Fanar 4%
ACWA Power 2.5%
Saudi Transformers 2.5%
SEMSC 1%
Total 100%
Supported by:
32
Saudi Aramco: Public
2) Description of the Lab Facilities
33GCC Electrical Equipment Testing Laboratory
• Land: 130,000 Square
meter
• Three independently
operated laboratories,
HV, HP and LV
• Power supply : 60
MW, 115 kV
Saudi Aramco: Public 34GCC Electrical Equipment Testing Laboratory
High Voltage Lab:
• Equipment UP to 420 KV
• Lightning Impulse Voltage:
1800 KV
• SWITCHING IMPULSE
VOLTAGE: 1600 KV
• AC VOLTAGE (50 / 60 HZ):
750 KV
Power Transformer:
• Voltage Rating 145 KV
• Lightning Impulse Voltage:
750 KV
• AC VOLTAGE (50 / 60 HZ):
275 KV
2) Description of the Lab Facilities
Saudi Aramco: Public 35GCC Electrical Equipment Testing Laboratory
Circuit Breakers, Switchgear, Cables:
• Test Current 7000 A
• AC VOLTAGE (50 / 60 HZ): 750 KV
Distribution Transformer:
• Voltage Rating 36 KV
• Rated Power 10 MVA
• SC Impedance: <20%
• AC VOLTAGE (50 / 60 HZ): 275 KV
2) Description of the Lab Facilities
Saudi Aramco: Public 36GCC Electrical Equipment Testing Laboratory
High Power Lab:
2 Generators
Rated voltage
kV
Test current
50 Hz 60 Hz
12 50 kA 50 kA
17.5 50 kA 50 kA
24 50 kA 50 kA
36 40kA 31.5kA
40.5 31.5 kA
31.5 kA
2) Description of the Lab Facilities
Saudi Aramco: Public 37GCC Electrical Equipment Testing Laboratory
High Power Lab:
3 Phase Synthetic Tests
Rated voltage
kV
Test current
50 Hz
60 Hz
72.5
50 kA
50 kA145
245
2) Description of the Lab Facilities
Saudi Aramco: Public 38GCC Electrical Equipment Testing Laboratory
High Power Lab:
1 Phase Synthetic Tests
Rated voltage
kV
Test current
50 Hz 60 Hz
245 63 kA 63 kA
300 63 kA 63 kA
420 63 kA 63 kA
2) Description of the Lab Facilities
Saudi Aramco: Public
3) Cost and Benefit – Cost Breakdown
39GCC Electrical Equipment Testing Laboratory
DescriptionInvestment
[%]
Operation
[%]
Revenues
[%]
Margin
[%]
High Voltage laboratory 16 % 25 % 26 % 25 %
High Power laboratory 63 % 49 % 56 % 62%
Low Voltage laboratory 4 % 18 % 18 % 18 %
General infrastructure 17 % 8 % 0 -3 %
TOTAL 100 % 4.4 % 11.4 % 7.0 %
Saudi Aramco: Public
3) Cost and Benefit – Cost Breakdown
40GCC Electrical Equipment Testing Laboratory
DescriptionInvestment
[1000 €]
Operation
[1000 €]
Revenues
[1000 €/yr]
Margin
[1000 €/yr]
High Voltage laboratory 17,438 1,127 3,019 1,892
High Power laboratory 66,154 2,242 6,798 4,556
Low Voltage laboratory 4,439 839 2,200 1,361
General infrastructure 17,117 374 0 -374
TOTAL 105,148 4,582 12,017 7,435
Saudi Aramco: Public 41GCC Electrical Equipment Testing Laboratory
Survey details:
• Local Market size was quantified by means of questionnaires.
• The survey quantified the expected test days for the next 5 years
• Responses were received from 4 users, and 9 manufacturers
IRR = 5.6%
Types M Euro
Tests 12
Opex - 4.5
Total 7.5
Revenues Streams
Types M Euro
Land 7
Landscape & Roads 4
HV Power Supply 3.5
Facilities 2.5
Equipment 88
Total 105
Capex
IRR = 8.9%
Base Case
Best Option
Others
Consultancy +20%
+20%
Donation -33%
Soft Loan -33%
Funding 33%
3) Cost and Benefit – Revenue Streams
Saudi Aramco: Public 42GCC Electrical Equipment Testing Laboratory
3) Cost and Benefit – Revenue Streams
Based on the responses, estimated Revenue is 7.5 M €, which results in lass than 20% utilization of the lab
With 100% of the lab, revenue, could reach to 90 M€.
Saudi Aramco: Public
3) Cost and Benefit – Market Size –
International
43GCC Electrical Equipment Testing Laboratory
CESI CPRI KEMA KERI Xihari
Country Italy India Netherland S. Korea China
Testing & Certification X X X X X
Consultancy X X X
# Employees
Annual Turnover (2009) (Million Euro) 125 13 256 Unknown Unknown
Saudi Aramco: Public
4) Operation Strategy – Mgt. Structure
44GCC Electrical Equipment Testing Laboratory
Saudi Aramco: Public 45GCC Electrical Equipment Testing Laboratory
Evaluation SubjectsManufacturer
OwnedUser
OwnedGovernment
OwnedMixed Owned
Perceived Confidentiality - + + 0
Perceived Independency - + + 0
Acceptability - + + 0
Entrepreneurial + 0 - 0
International Orientation + 0 - +
4) Operation Strategy – Forms of Ownership
• Manufactured Owned is favored• Utility owned is Popular• Government Owned is available, but there is fear of stagnation• Mixed owned: users, manufacturers, research institutes, standardization institutes and/or
another independent third party laboratory. But, shares or votes of entities shall be divided in such way that no single manufacturer has the majority and may limit the combined participation of the manufacturers to less than 50%.
Saudi Aramco: Public
5) Implementation Roadmap
46GCC Electrical Equipment Testing Laboratory
Realization of the LV laboratory
The HV laboratory:
Phase B.1 : MV test area
Phase B.2 : HV test cell (after installing the
second generator in the HP laboratory)
The HP laboratory:
Phase C.1 : realization of the first generator
Phase C.2 : simultaneous realization of the
second generator and the synthetic
installations (after the decision has been taken
to realize the HV test cell)
Phas
e A
Phas
e C
Phas
e B
Saudi Aramco: Public
Low Voltage
High Power
High Voltage
Testing Facilities
48
Saudi Aramco: Public
Success Factors
1. Participation of Strategic Shareholders
2. Partnership with an International Lab
3. Independence
4. International Standards/Recognition
5. Mandating Testing by GSO & SASO
6. Strategic Location
Saudi Aramco: Public
1. Company Established
2. 10 Companies Shareholders
3. Board is Formed
4. Land is reserved by Modon
5. Three International Partners
6. SASO & ECRA Support
49
Progress Update