Group confirms Saudi wind EPC contract awards
27 June 2024
The developer consortium for the two wind independent power producer (IPP) projects in Saudi Arabia has signed the engineering, procurement and construction (EPC) contracts for the projects with a team comprising Power Construction Corporation of China (Power China) and Sepco 3.
A team comprising Japan's Marubeni Corporation and the local Abdulaziz Al-Ajlan Sons Company for Commercial and Real Estate Investment (Ajlan & Bros) won the contract to develop the 600MW Al-Ghat and 500MW Waad Al-Shamal wind IPP projects in May.
The Marubeni-led consortium subsequently appointed Power China and Sepco 3 as EPC contractors for the projects.
"The EPC contracts have been signed and are being finalised by [the] legal [team]," a source close to the two projects tells MEED.
The Al-Ghat and Waad Al-Shamal wind IPPs and a third one in Yanbu are being procured under the fourth round of Saudi Arabia's National Renewable Energy Programme (NREP).
The Al-Ghat wind IPP project achieved a new world-record-low in terms of levelised electricity cost from wind power at $cents 1.56558 a kilowatt-hour (kWh), or about 5.87094 halalas/kWh, the Saudi Energy Ministry announced in May.
The Waad Al-Shamal project has also achieved a second world-record-low for wind power at $cents 1.70187/kWh or 6.38201 halalas/kWh.
The winning bidder for the third project – the 700MW Yanbu wind IPP – has yet to be confirmed.
In addition to the Marubeni consortium, the following developer teams submitted proposals for the contracts to develop the three wind IPP schemes:
- Acwa Power (Saudi Arabia) / TotalEnergies Renewables (France)
- EDF Renewables (France) / Masdar (UAE) / Nesma Company (local)
- Engie (France) / Albawani Company (local) / Haji Abdullah Alireza & Company (local)
- Sumitomo (Japan) / Aljomaih Energy & Water Company (local) / Shikoku Electricity Power Company (Japan)
The financial advisory division of Tokyo-based Sumitomo Mitsui Banking Corporation is advising SPPC on procuring the three wind IPPs.
Saudi Arabia has procured only one wind IPP under the NREP so far.
Tendered under round two, the 400MW Dumat Al-Jandal wind IPP was connected to the Saudi electricity grid last year.
A team of France’s EDF Renewables and UAE-based Abu Dhabi Future Energy Company (Masdar), which won the $500m contract in 2019, is developing and operating the Dumat Al-Jandal wind IPP.
New renewable target
Saudi Arabia aims to install 58,700MW of renewable energy capacity by 2030 through the NREP. MEED understands the target has been increased to 100-130GW, subject to demand growth.
The Energy Ministry, through SPPC, is tasked with procuring 30% of this capacity through public tendering. Saudi sovereign wealth vehicle the Public Investment Fund will procure the rest under the kingdom’s Price Discovery Scheme.
Both initiatives aim to drive renewable sources to account for 50% of electricity production in Saudi Arabia by 2030, displacing liquid fuels, with natural gas accounting for the remaining 50%.
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