Competition beckons for battery storage IPPs

14 January 2025

Commentary
Jennifer Aguinaldo
Energy & technology editor

Battery energy storage system (bess) projects in the GCC region have attracted international and local utility developers, investors, and engineering, procurement and construction (EPC) contractors specialising in thermal and renewable energy power plants. 

In late December, principal buyer Saudi Power Procurement Company (SPPC) prequalified 33 companies that can bid as consortium lead, managing or technical members for contracts to develop Saudi Arabia’s first batch of bess projects. These projects will be procured using an independent power producer (IPP) model.

The kingdom’s first independent bess projects will comprise four schemes with a combined capacity of 2,000MW, equating to about four hours or 8,000 megawatt-hours (MWh) of storage.

In comparison, 29 companies prequalified for the first bess projects in Abu Dhabi, which will have a storage capacity of roughly 800MWWh.

Amid international developers’ dwindling appetite to bid for thermal power plants due to their carbon neutrality targets and concerns about low margins, particularly for solar photovoltaic (PV) power plants, bess projects appeal to developers on either side of the fence due to the scope for innovation in technologies and financing structures.

Bess facilities are designed to strengthen electricity grids’ flexibility by accommodating more intermittent renewable power. They complement open-cycle gas turbine plants designed to provide backup capacity.  

Saudi Arabia has the upper hand, with The Red Sea Company delivering one of the world’s largest existing bess facilities, with a capacity of 1,300MWh, as part of its multi-utility IPP package. Construction works are under way for a 400MW bess facility to support the $8.4bn Neom green hydrogen project and a 700MWh facility catering to Amaala. 

Saudi Electricity Company also awarded EPC contracts to build substantial energy storage capacity last year. Dubai and Oman plan to develop bess facilities over the coming years.   

Beyond the GCC, Morocco has received bids for the contracts to develop its first set of solar plus bess contracts, departing from a previous strategy to procure hybrid solar PV and concentrated solar power (CSP) schemes.

It will be interesting to see which companies eventually submit proposals for Abu Dhabi and Riyadh’s first batch of bess IPPs, given that some qualified developers anticipate highly competitive bids due to the universal appeal of the projects.

A wait-and-see attitude could help avoid some of the risks endemic in a relatively new utility asset class, while early success will help position them in a niche market, acquiring experience to help them price future bids better.

Related readBattery storage gains foothold

https://image.digitalinsightresearch.in/uploads/NewsArticle/13260764/main.jpg
Jennifer Aguinaldo
Related Articles
  • Dubai heads towards record year for road construction MEED EDITORIAL

    18 September 2025

    Commentary
    Colin Foreman
    Editor

    Dubai is investing heavily in infrastructure as it strives to keep up with the pace of real estate development across the city.

    The most recent award was in early September, when the Roads & Transport Authority (RTA) selected Beijing-headquartered China Civil Engineering Construction Corporation as the contractor for the Al-Safa Street improvement project.

    According to regional projects tracker MEED Projects, Dubai is on course for a record year in 2025, with awards already reaching $1.216bn year-to-date. That exceeds the 2024 total of $774m and is almost equal to the total for the whole of 2023, positioning 2025 to surpass the previous peaks of $1.621bn in 2017 and $1.644bn in 2008.

    Road construction awards had slumped to just $101m in 2020 and $139m in 2021, reflecting both the impact of the pandemic and a slowdown in project spending. Since then, a strong recovery has taken hold as the government prioritises transport links to support growth areas such as Dubai South, Al-Maktoum International airport and new housing corridors.

    By allocating record spending to road construction, Dubai is signalling that it recognises the urgency of the problem.

    Building roads alone is not enough. To remain an efficient global city, Dubai needs a modern transportation network that does not just rely on roads. More metro lines are under construction and are being planned, and there are also plans for cable car systems and tunnel networks.  

    These projects will take time to be delivered. In the meantime, the record awards of 2025 are a welcome sign that road capacity will increase, even if congestion remains an ongoing problem in the short term.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14696781/main.jpg
  • Three bids submitted for Riyadh-Qassim IWTP Mark Dowdall

    18 September 2025

     

    Register for MEED’s 14-day trial access 

    State water offtaker Saudi Water Partnership Company (SWPC) has received three bids from the private sector for the development of the Riyadh-Qassim independent water transmission pipeline (IWTP) project.

    The bids were submitted by two consortiums and one individual company.

    The first consortium comprises Saudi firms Al-Jomaih Energy & Water, Al-Khorayef Water & Power Technologies, AlBawani Capital and Buhur for Investment Company.

    The second consortium comprises Bahrain/Saudi Arabia-based Lamar Holding, the UAE's Etihad Water & Electricity and China’s Shaanxi Construction Installation Group.

    The third bid was submitted by Saudi Arabia's Vision Invest.

    In August, MEED exclusively reported that SWPC had extended the bid submission deadline again for a contract to develop and operate the project. 

    The deadline for bids was 17 September.

    The project will have a transmission capacity of 685,000 cubic metres a day. It will include a pipeline length of 859 kilometres (km) and a total storage capacity of 1.59 million cubic metres.

    The scheme is the third IWTP contract to be tendered by SWPC since 2022.   

    The first two are the 150km Rayis-Rabigh IWTP, which is under construction, and the 603km Jubail-Buraydah IWTP, the contract for which was awarded to a team of Riyadh-based companies comprising Al-Jomaih Energy & Water, Nesma Group and Buhur for Investment Company.

    Like the first two IWTPs, the Riyadh-Qassim IWTP project will be developed using a 35-year build-own-operate-transfer contracting model.

    Commercial operations are expected to commence in the first quarter of 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14691078/main.jpg
    Mark Dowdall
  • Saudi Arabia seeks firms for six renewable projects Mark Dowdall

    17 September 2025

    Register for MEED’s 14-day trial access 

    Saudi Arabia's principal buyer, Saudi Power Procurement Company (SPPC), has invited interested companies to prequalify for the contracts to develop and operate solar photovoltaic (PV) and wind independent power producer (IPP) projects with a total combined capacity of 5,300MW.

    The following schemes comprise round seven of the kingdom's National Renewable Energy Programme (NREP):

    • 1,400MW Tabjal 2 solar PV IPP (Tabrijal, Al-Jouf Province)
    • 600MW Mawqqaq solar PV IPP (Mawqqaq, Hail Province)
    • 600MW Tathleeth solar PV IPP (Tathleeth, Aseer Province)
    • 500MW South Al-Ula solar PV IPP (Al-Ula, Medina Province)
    • 1,300MW Bilgah wind IPP (Bilgah, Medina Province)
    • 900MW Shagran wind IPP (Shagran, Medina Province)

    These projects are part of the NREP, which aims to achieve an optimal energy mix and supply 50% of the kingdom's electricity from renewable energy by 2030.

    Earlier rounds under the NREP have already put in place large capacities.

    Round six solicited around 4,500MW of solar and wind projects:

    • 1,500MW Dawadmi wind IPP  (Riyadh)
    • 1,400MW Najran solar PV IPP (Najran)
    • 600MW Samtah solar PV IPP (Jizan)
    • 600MW Al-Darb solar PV IPP (Jizan)
    • 400MW Al-Sufun solar PV IPP (Hail)

    In April, MEED reported that prequalified developers were forming teams to bid for the contracts to develop solar farms under the sixth round of the NREP.

    A separate set of bidders were prequalified for the 1,500MW Dawadmi wind farm, with contracts due to be awarded before the end of the year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14684103/main3708.jpg
    Mark Dowdall
  • Qatar tenders Smaisma infrastructure contract Yasir Iqbal

    17 September 2025

     

    Register for MEED’s 14-day trial access 

    Qatar’s Public Works Authority (Ashghal) has tendered a contract inviting construction firms to bid for the remaining works on roads and infrastructure in the small seaside town of Smaisma.

    The contract covers package two in the south area of Smaisma, located 52 kilometres (km) north of Hamad International airport.

    The scope of work includes the completion of the remaining works and remedial works on three zones. Each zone is further divided into three sub-zones.

    The scope also covers the remaining works on road C1017.

    The contract duration is two years from the start of construction works.

    The tender was floated on 15 September with a bid submission date of 28 October.

    The latest notice follows the tendering for the construction of roads and infrastructure in Wadi Al-Banat North (Zone 70).

    Market overview

    After 2019, there was a consistent year-on-year decline in contract awards in Qatar’s construction and transport sectors. The total value of awards in that year was $13.5bn, but by 2023 it had fallen to just over $1.2bn.

    In 2024, the value of project contract awards increased to $1.7bn, bucking the downward trend in the market in the preceding four years.

    Of last year’s figure, the construction sector accounted for contract awards of over $1.2bn, while transport contract awards were about $200m.

    There are strategic projects in the bidding phase in Qatar worth more than $5bn, and these are expected to provide renewed impetus to the construction and transportation market, presenting opportunities for contractors in the near term.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14682452/main.jpg
    Yasir Iqbal
  • Dragon Oil to boost exploration and production in Egypt Wil Crisp

    17 September 2025

    Register for MEED’s 14-day trial access 

    Dubai-based Dragon Oil has signed a deal with the state-owned national oil company Egyptian General Petroleum Corporation (EGPC), agreeing to increase exploration and production activities in the Gulf of Suez.

    Under the terms of the agreement, Dragon Oil will make investments worth about $30m.

    This will fund activities including a programme to drill at least two new wells in the East El-Hamd area.

    Abdulkarim Ahmed Al-Mazmi, the acting chief executive of Dragon Oil, said: “The signing of this agreement reaffirms Dragon Oil’s commitment to strengthening its strategic presence in the Arab Republic of Egypt and supporting EGPC’s efforts to develop energy resources in the Gulf of Suez region, in line with the company’s vision for growth and sustainability.”

    Dragon Oil is wholly owned by Emirates National Oil Company, which is fully owned by the Government of Dubai.

    Al-Mamzi said that the new investments are part of Dragon Oil’s broader strategy to expand in regional markets and to strengthen its position in the oil and gas sector, in line with the directions of the government of the UAE, and in particular the Government of Dubai.

    The agreement was signed at the EGPC headquarters in Cairo.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14680456/main.png
    Wil Crisp