POWER 

RENEWABLES HELP SAUDI UNLOCK ENERGY OPPORTUNITIES

The Saudi Electricity Company (SEC) spent a record SAR 60 billion in capital expenditures in 2024, up by 44% from the previous year. The funding was directed toward expanding renewable energy capacity, improving grid stability, and enhancing service reliability.

SEC connected 6.8 gigawatts (GW) of renewable energy to the grid by the year-end, with an additional 27.3 GW under development and tenders issued for another 33.2 GW, the company announced. 

To support grid resilience, SEC launched Saudi Arabia’s first large-scale battery energy storage system (BESS) in Bisha, with a capacity of 500 megawatts (MW), and advanced five additional storage projects totalling 2,500 MW. 

The company’s financial results for 2024 also highlighted the significant strides in renewable energy integration and sustainable finance. SEC reported total operating revenues of SAR 88.7 billion, an 18% increase from SAR 75.3 billion in the previous year, driven by sustained electricity demand, expansion of regulated asset bases, and higher returns on capital investment. 

In addition, the company emphasised its ongoing transition toward clean energy and the strengthening of its financial sustainability through green financing initiatives.

SEC also made progress in regional energy interconnectivity, commissioning the 3 GW Saudi-Egypt interconnection project and exploring new links with Italy, Greece, and India. Customer service improvements were reflected in an 82.3% satisfaction rate, with significant reductions in power outage duration and frequency.

GREEN FINANCE

In sustainable finance, SEC successfully priced a USD 2.75 billion dual-tranche senior unsecured RegS Sukuk, including a USD 1.25 billion 10-year green sukuk with a profit rate of 5.489%. This issuance, SEC’s fourth green sukuk under its Green Sukuk Framework, reinforces its commitment to financing eligible green projects in renewables and energy effciency. Since 2020, SEC has raised USD 3.75 billion through green sukuks, supporting its ambition to reach net zero by 2050. 

The issuance reflects SEC’s ability to attract strong global investor interest, ensuring a steady flow of capital for its ambitious renewable energy projects and digital transformation initiatives. SEC’s commitment to sustainability is backed by a robust financial strategy, further strengthening our position as a leader in the energy transition. 

The issuance was met with strong demand, with an order book exceeding USD 12 billion – 4.3 times oversubscribed – reflecting investor confidence in SEC’s financial stability and sustainability agenda. The company maintained high investment-grade ratings from leading agencies, with Moody’s upgrading SEC to Aa3 (stable) and Fitch raising its rating to A+ (stable). 

NEOM PARTNERSHIP

Beyond SEC’s efforts, Saudi Arabia continues to expand its leadership in green energy and digital infrastructure. NEOM signed a partnership agreement with DataVolt to develop a 1.5 GW AI-powered data centre in Oxagon, fully powered by renewable energy. The USD 5 billion initial investment will create a high-density, energy-effcient computing hub, setting new global standards for sustainable data centre operations.

As global electricity demand from data centres rises, projects like Oxagon’s AI hub demonstrate Saudi Arabia’s commitment to leveraging its abundant renewable energy resources for a more sustainable digital economy. With continued investments in clean power and sustainable finance, the kingdom is reinforcing its position as a global leader in energy transition. 

Data centres currently account for 1% to 1.3% of total global electricity consumption, which is expected to increase significantly over the next decade due to the rapid growth of generative AI technologies, according to the International Energy Agency (IEA). Therefore, clean and sustainable solutions are urgently needed to address the high energy consumption and cut carbon footprint of data centres.

DATA STORAGE HUB

Saudi Arabia has also emerged as one of the top 10 global markets in the field of battery energy storage, coinciding with the launch of the Bisha Project, which has a capacity of 2000 megawatt-hour (MWh) and is one of the largest energy storage projects in the Middle East and Africa.

Through the National Renewable Energy Program, overseen by the Ministry of Energy, the kingdom aims to achieve a storage capacity of up to 48 gigawatt-hours (GWh) by 2030. So far, 26 GWh of storage projects have been tendered, and they are at various stages of development. 

These projects play a pivotal role in supporting the expansion of renewable energy, thereby helping achieve the targets of the national energy mix. The kingdom aims for 50% of total electricity production to be generated by renewables by 2030.

The country plans to operate 8 GWh of energy storage projects by 2025, and 22 GWh by 2026, positioning itself as the third largest global market in energy storage projects, after China and the United States, based on the storage capacities announced to date.