Competition brings innovation in Saudi power equipment

March 31, 2026

Hussain Adel, CEO of TIEPCO, talks to The Energy Year about how urbanisation and renewables are driving a massive surge in demand for electrical equipment in Saudi Arabia and how technological advances are reshaping competitive dynamics.

TIEPCO manufactures electrical equipment for power utilities and industrial companies.

• Competition has increased rapidly in the Saudi electrical equipment space and eroded supplier margins. The price of smart RMUs, for example, has dropped by around 30% since they were first introduced in Saudi Arabia.
• As transmission infrastructure becomes more sophisticated and interconnected, equipment suppliers are increasingly required to integrate electrical, telecommunications and cybersecurity capabilities into their offerings.
• Saudi localisation requirements are particularly high in the switchgear space, with regulators mandating that around 70% of the product generate value inside the country.

How has competition been evolving in Saudi Arabia’s switchgear and electrical equipment protection space?
Until about five years ago, Saudi Arabia only had four or five switchgear suppliers, and today there are more than 20, primarily due to the arrival of Chinese manufacturers, who have moved into Saudi Arabia on a very large scale.
However, at the same time, demand has increased dramatically. Saudi Arabia is building new cities and advancing large energy projects that require massive upgrades to the power network. To illustrate the scale of the boom, a few years back, industry estimates placed the average annual demand for switchgear, ring main units (RMUs) and metred RMUs at 15,000 units. Today, demand can reach up to 50,000 units per year, and the trend extends also to other electrical equipment.

 

How are these dynamics affecting prices?
The rapid growth in the number of competitors has lowered prices. When smart RMUs were first introduced, typical market prices were around SAR 48,000 [USD 12,788] per unit, and today the price is around SAR 32,000 [USD 8,527]. This illustrates how quickly competition can erode margins and reshape the economics of a sector.
Nevertheless, there is a limit to how far prices can fall. Every manufacturer has a threshold below which production becomes unsustainable. Once the market approaches that level, companies must focus on optimising efficiency and controlling costs to remain profitable. The sector is entering a phase where companies must carefully balance competitiveness and business sustainability.

Have Saudi Arabia’s localisation policies affected the competitive dynamic?
Localisation is one of the most important factors shaping the market today. Saudi Arabia does not want a system built entirely on foreign-supplied equipment. If a company wants to sell equipment in the Saudi market, it must either open a factory or partner with a local manufacturer, which is what most foreign companies choose to do.
Localisation requirements are particularly high in switchgear. The authorities require that approximately 70% of the product generate value inside Saudi Arabia. Local content is not determined only by how units are physically manufactured, but also by the number of Saudi employees, their salaries and the proportion of locally sourced inputs.
Meeting these standards is not straightforward, as companies must recruit and train local employees and develop local supply chains. However, those who succeed can reap significant benefits because they are in a much better position to participate in large projects.
This policy has fundamentally reshaped the ecosystem, giving local manufacturers a more important role and encouraging partnerships between international technology providers and Saudi players. In many ways, it transformed competition into collaboration.
The transformation has actually worked in our favour. Our most intense competition has historically come from Schneider Electric, which for many years dominated the market for RMUs – our core product – along with TIEPCO.
Around 2017, the introduction of stronger local content requirements made it more difficult for multinationals to compete in Saudi Arabia, as their production depended heavily on imported components that negatively affected their localisation score. Several changed their strategy. Schneider, for example, repositioned itself as a technology supplier. They approached us with a partnership model under which they supply the core components, and we handle the manufacturing, allowing them to remain in the market while also strengthening our position.

What are the main drivers behind the surge in demand, and what factors will determine future growth?
One of the most important drivers of demand for our products is the growing number of renewable energy projects that need to be connected to the national grid. At the same time, the technical requirements of the network are evolving, with one major trend being the introduction of smart RMUs that can be monitored and controlled remotely. A third driver is cybersecurity. As power infrastructure becomes increasingly digital and interconnected, one must ensure it cannot be compromised.
Together, these developments are creating integrated demand for traditional electrical equipment, telecommunications systems, cybersecurity solutions and associated digital technologies. For manufacturers who can adapt to these changes and expand their portfolios, the opportunities are significant, as the project pipeline suggests that the current boom could continue for six years or more.
The biggest growth opportunity we see for TIEPCO is in power distribution equipment. As urban developments proliferate, the demand for distribution networks to deliver electricity to end users will increase considerably. Thousands of new distribution units will need to be installed across the country.

What investments are you making to capture this opportunity?
To remain competitive, we must invest in both manufacturing capacity and technology. We are purchasing new machines and developing specialised production lines within our facilities, and even exploring the possibility of acquiring land to build a new factory. Expansion is essential to maintain and grow our market position.
Alfanar and Lucy Electric are among the leaders in the switchgear space with a high market share. Our ambition is to generate revenues of SAR 200 million [USD 53.3 million] and capture at least a 25% share once our expansion plans are completed.

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