Saudi Electricity SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. The regulatory environment has become more complex in Saudi Arabia: The Company might face unforeseen risks associated with the regulations and provisions regulating the electricity sector, especially those risks related to the adjustment of systems, regulations, and decisions governing the electricity sector, as well as the non-compliance with the regulatory framework of the company's policies. As a result, the company has established a specialized unit to ensure compliance with internal and external regulations and to promote a culture of commitment. The tariffs as recommended by a regulatory agency to the Council of Ministers, in 2018, were revised upwards across all consumer segments. Specifically, residential electricity prices increased from 0.05 SAR/kWh to 0.18 SAR/kWh for monthly consumption of 1–6,000 kWh. Tariffs increased between 15 and 100% for high-usage residential consumers, between 15% and 33% for commercial consumers, 20% for industrial consumers, and 23% for all government entities. While expectations of further tariff increases in the short term are high, there remains uncertainty around the timing and the magnitude of such increases. Unlike some Gulf Cooperation Council (GCC) peers, SEC does not benefit from a transparent and predictable tariff-setting mechanism, let alone a total cost recovery principle embedded in a tariff formula, which is less beneficial compared to other frameworks in the GCC. In this way, political interference and bureaucracy in the regulatory environment can affect the company.

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Political

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Economical

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Social

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Technological

Legal

1. Increasing pressure to conform with changing rules and regulations: The Company might face unforeseen risks associated with the regulations and provisions regulating the electricity sector, especially those risks related to the adjustment of systems, regulations, and decisions governing the electricity sector, as well as the non-compliance with the regulatory framework of the company's policies. As a result, the company has established a specialized unit to ensure compliance with internal and external regulations and to promote a culture of commitment. Also, environmental regulations are becoming stricter and the company faces a risk of violating them too. So, it should make sure that it remains updated will all the rules and regulations and comply with them simultaneously.

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Environmental

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