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A team led by Japanese utility developer and investor Marubeni Corporation is expected to win the contract to develop and operate the 700MW Yanbu wind independent power producer (IPP) project in Saudi Arabia.

It is the third such project tendered under the fourth round of the kingdom's National Renewable Energy Programme (NREP).

MEED previously reported that the contract is expected to be awarded before the end of the year.

"The contract will be awarded to Marubeni … soon," said a source close to the project.

It is understood that other teams, separately led by local utility developer Acwa Power, France's Engie and EDF Renewables, submitted proposals for the contract to develop the scheme.

Marubeni Corporation and the local Ajlan & Bros won the contracts to develop the first two wind schemes of NREP round four, the 600MW Al-Ghat and the 500MW Waad Al-Shamal wind IPPs, in May this year.

Following the award of the two contracts, MEED reported in May that market expectations and speculation had intensified regarding the award of the Yanbu wind contract, as well as the winning bidder's proposed tariff.

At the time, some industry sources alluded to land issues as a key factor holding back the award of the contract.

An industry source also points out that Yanbu has lower wind potential and wind speed, resulting in a lower capacity factor compared to the other two locations. "It is interesting to see whether it results in a lower tariff offer," the source said.

World record-low tariffs

The Marubeni-led consortium has agreed to develop and operate the 600MW Al-Ghat wind IPP project with a new world-record-low levelised electricity cost (LCOE) from wind power of $cents 1.56558 a kilowatt-hour (kWh), or about 5.87094 halalas/kWh.

The 500MW Waad Al-Shamal project has also achieved a second world-record-low tariff for wind power of $cents 1.70187/kWh or 6.38201 halalas/kWh, the energy ministry announced.

The tariff achieved for Al-Ghat is almost 22% lower compared to the LCOE agreed for Saudi Arabia's first wind IPP, the 400MW Dumat Al-Jandal scheme, which a team comprising the UAE's Abu Dhabi Future Energy (Masdar) and France's EDF Renewables won in 2019.