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Neom to start $2.7bn hydropower scheme qualification

12 March 2024

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Saudi Arabia’s Neom, through its subsidiary Enowa, is expected to issue the request for qualifications (RFQ) for a contract to develop and operate the first phase of the development’s planned pumped hydropower storage (PHS) network in the second quarter of 2024.

According to industry sources, the client received expressions of interest in bidding for the project from developers and contractors in January.

MEED previously reported that Neom had approached developers and investors to discuss the development of a pumped hydropower storage project, which will be developed using an independent power producer (IPP) model. 

The planned first phase of Neom’s PHS project will have an installed capacity of 2,200MW and a storage capacity of 23.1 gigawatt-hours (GWh), or roughly 11 hours, according to industry sources.

It will be developed using a build-own-operate-transfer (BOOT) model that is expected to cover 40 years, excluding the construction period.

The expected capital expenditure for the project is $2.7bn.

The overall infrastructure will entail the development of four pumped hydropower storage stations in Neom. The planned schemes will form the backbone of an energy storage infrastructure at the SR1.5tn ($500bn) development. 

The UK-based HSBC and the US-based White & Case are advising the client on the scheme.

The pumped hydropower storage IPP project will complement Neom’s planned multi-gigawatt renewable energy infrastructure, in line with its vision of being 100% powered by renewable energy by 2030.

Pumped hydropower storage is a form of clean energy storage that is ideal for electricity grids that are reliant on solar and wind power, according to the International Hydropower Association, which says: “The technology absorbs surplus energy at times of low demand and releases it when demand is high.” 

A pumped hydropower storage facility typically comprises two water reservoirs at different elevations that can generate power when water passes through a turbine and moves down or is discharged from the upper reservoir to the lower reservoir.

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Jennifer Aguinaldo

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