RENEWABLE

BIG PUSH FOR RENEWABLE PROJECTS LIFTS SAUDI’S CLEAN ENERGY CAPACITY

Saudi Arabia is forging ahead with new sustainable energy projects to ramp up its renewable energy capacity.

The National Renewable Energy Program (NREP) has already achieved impressive progress, with the kingdom raising 44 gigawatts (GW) of renewable energy capacity and aiming for an additional 20 GW this year, according to the Ministry of Energy.

A massive geographical survey is underway to identify renewable energy sites, and significant investments are being made in gas-based power generation and carbon capture technologies. The kingdom also is expanding its electricity transmission and distribution networks to ensure reliable and sustainable energy supply across the country.

ENERGY MIX

In November, the Saudi Power Procurement Company (SPPC) awarded contracts to the winning consortia for the Rumah-1, Rumah-2, Al-Nairyah-1, and Al-Nairyah-2 Independent Power Projects (IPPs). 

These projects, totalling approximately 7.2 GW, are part of Saudi Arabia’s energy diversification strategy, led by the Ministry of Energy, to meet future electricity demand, shift toward renewable and gas energy, and reduce reliance on liquid fuels. The plan aims to achieve an energy mix of 50% renewable energy and 50% natural gas by 2030, while also supporting Saudi Vision 2030 and the Saudi Green Initiative’s net-zero goals by 2060 through the circular carbon economy approach.

AWARDED CONTRACTS

The awarded consortia include Rumah-1 (1.8 GW), a consortium of Saudi Electricity Company (SEC), ACWA Power, and Korea Electric Power Corporation (KEPCO), with SEC as the lead technical and managing member.

Rumah-2 (1.8 GW) is led by Abu Dhabi National Energy Company (TAQA), with JERA and Al-Bawani as partners, where TAQA assumes the technical and management role.

Nairyah-1 (1.8 GW), which is similar to Rumah-1. SEC, ACWA Power, and KEPCO make up the consortium for Nairyah-1, with SEC as the leading member.

Meanwhile, Nairyah-2 (1.8 GW) is also assigned to TAQA, JERA, and Al-Bawani, with TAQA in a leading technical and managerial role.

Each project will operate under a 25-year power purchase agreement (PPA), with SPPC on a build-own-operate (BOO) basis. It has an estimated combined investment of SAR 30 billion. The projects will meet localisation requirements and are expected to support the Saudi economy by utilising Class H/J high-effciency gas turbines with combined cycle technology, allowing for potential integration of carbon capture solutions. Collectively, these plants will generate power for around 3 million homes annually.

SPPC, under the Saudi Electricity Regulatory Authority’s oversight, manages IPP tendering and contracting, purchases electricity from IPPs, and ensures alignment with national energy objectives.

SOLAR ENERGY PROJECTS

In October, SPPC announced the shortlisted consortiums for four solar energy projects under the fifth phase of the NREP, supervised by the Ministry of Energy. According to the company, investments in the four projects amount to around SAR 8 billion.

The projects include Al-Sadawi Solar Photovoltaic (PV) Project with a capacity of 2,000 megawatts (MW), the Al-Masa’a Solar PV Project with a capacity of 1,000 MW, the Al-Henakiyah 2 Solar PV Project with a capacity of 400 MW and the Rabigh 2 Solar PV Project with a capacity of 300 MW.

The winning company for each project will sign a 25-year PPA with SPPC.

BATTERY POWERHOUSE

Separately in November, SPPC started the qualification process for the first group of four battery energy storage system (BESS) projects. 

BESS are increasingly essential for modern energy grids and renewable energy projects. BESS can help boost grid stability and reliability, and renewable energy integration to ensure that renewable sources such as solar and wind, which are intermittent, can be stored and used when production is low, promoting a stable renewable energy supply.

BESS also helps reduce the need for expensive peak power plants, ultimately lowering electricity costs for consumers and utilities. While helping cut carbon emissions, they also sever backup power during grid outages, ensuring continuous operation for critical facilities and reducing downtime for businesses and industries.

Each BESS project will be developed under a BOO model, with the successful bidder holding 100% equity in the special purpose vehicle (SPV) set up to develop and operate the independent storage provider (ISP) project. Each SPV will enter into a 15-year storage services agreement with SPPC.

The combined capacity of Group 1 BESS projects is 2000 MW/4Hrs (8000 MWh). Two of the four 5,00 MW projects are expected to be in Makkah region, one in Qassim region and the fourth in Hail region. 

The newly launched energy storage programme will help the kingdom obtain 50% renewable energy in the mix by 2030, enhancing the reliability and resilience of the electric power system.