ESG

RENEWABLE PROJECTS UNDERSCORE SAUDI’S CLIMATE GOALS

The Saudi Power Procurement Company (SPPC) issued in September a request for qualification (RFQ) for the sixth round of solar and wind projects under the National Renewable Energy Program (NREP), and overseen by the Ministry of Energy.

The total capacity for these Round 6 projects is 4,500 megawatts (MW), broken down into: 1,500 MW Dawadmi Wind IPP in the Riyadh region, 1,400 MW Najran Solar PV IPP in the Najran region, 600 MW Samtah Solar PV IPP in the Jazan region, 600 MW Darb Solar PV IPP in the Jazan region, and 400 MW Sufun Solar PV IPP in the Hail region.

The initiatives are part of NREP's broader goal to achieve optimal energy mix, with the aim of sourcing 50% of Saudi Arabia’s electricity from renewable energy by 2030. SPPC manages the pre-development, tendering, and energy procurement for these projects, having already awarded over 19 GW of renewable energy capacity through the programme.

The latest round of building the kingdom’s renewable energy capacity comes as the Saudi Electricity Company said it achieved a significant43% improvement in its 2024 Environmental, Social, and Governance (ESG) rating, according to Standard & Poor's (S&P). SEC's score increased from 35 to 50, reflecting the company's commitment to sustainability as it aligns its goals with those of the kingdom’s energy sector.

SEC has integrated sustainability principles into its operations through various ESG initiatives, as well as pledging to achieve net-zero emissions by 2050, and prioritising community engagement and transparency in its governance practices.

“As a key player in the kingdom's energy strategy, SEC significantly contributes to the goal of achieving a 50/50 energy mix by 2030 – 50% renewable energy and 50% high-eFFciency natural gas-powered plants under the supervision of the Ministry of Energy,” the company said.

SEC's strategy emphasises environmental protection, social responsibility, and high governance standards across its operations, aligning with national and international priorities. The company's sustainability efforts adhere to recognised global standards and the kingdom's ESG guidelines issued by the Saudi Exchange (Tadawul), while meeting investor disclosure expectations. SEC continuously refines its environmental and social standards based on its ESG rating to ensure alignment with the highest sustainability benchmarks.

IMF IDENTIFIES CLIMATE MILESTONES

The International Monetary Fund’s (IMF) latest report identifies the kingdom’s significant steps to reduce greenhouse gas emissions and decarbonise its economy. Despite being one of the largest per capita emitters due to its sizable energy sector, Saudi Arabia has the second-lowest carbon intensity among major oil producers, just behind Denmark. 

In 2023, the kingdom lowered its Scope 1 emissions by 2.3%, while keeping Scope 2 emissions below pre-COVID levels, even with increased oil production. This progress was driven by a 5.5% reduction in flaring intensity compared to 2020. As part of its Nationally Determined Contribution (NDC) target for 2030 and its goal of achieving net-zero emissions by 2060, the country is intensifying efforts across several areas, such as:

Renewable Energy: Saudi Arabia's renewable energy capacity has quadrupled over the past year to 2.8 gigawatts (GW). Tenders for 14.4 GW have been issued, and an additional 8.2 GW is under development, with a goal of reaching 23 GW by the end of 2024. The kingdom has revised its 2030 renewable energy target from 58.7 GW to between 100 and 130 GW, to meet growing energy demands. From 2025 onward, the country plans to add 20 GW of renewable capacity annually, with ACWA Power, a PIF subsidiary, expected to provide 70% of that capacity

Saudi Energy Efficiency Program (SEEP): Launched in 2012, SEEP aims to improve energy eciency across industrial, government, and commercial sectors. Stringent energy standards for buildings, thermal insulation materials, and air conditioning, along with tighter regulations for appliances and vehicles, are helping to reduce emissions. The programme has contributed to savings equivalent to 492,000 barrels of oil per day in energy consumption by the end of 2022.  

Hydrogen Development: Saudi Arabia is capitalising on its natural resources to become a global leader in blue and green hydrogen production. Despite challenges in securing long-term offtake agreements, the kingdom has signed a 30-year agreement for its NEOM green hydrogen project, valued at USD 8.6 billion, which is expected to begin operations in 2026.

Carbon Capture, Utilisation, and Storage (CCUS): Currently, Saudi Arabia captures 1.3 million tonnes of CO2 per year through its SABIC United Plant and Uthmaniyah project. The kingdom is also developing one of the world’s largest carbon capture and storage hubs, which will be operational by 2027 with a capacity of 9 million tonnes per year. By 2035, this capacity is projected to increase to 44 million tonnes annually. Front-end engineering design (FEED) studies have been completed, and storage sites have already been identified.

These initiatives position Saudi Arabia as a key player in global efforts to combat climate change while driving its transition toward a more sustainable and diversified economy.