Meed | Market expects Nestor hydropower tender

Market expects Nestor hydropower tender

22 July 2024

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Neom's utility subsidiary, Enowa, is expected to issue the request for proposals (RFP) for a contract to develop and operate the first phase of Neom's pumped hydropower storage (PHS) network in the fourth quarter of 2024.

International and local developers and investors submitted their statements of qualifications to bid for the contract on 30 June.

"The prequalification process is ongoing. I believe the RFP will not be issued until Q4," said a source close to the project.

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

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

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

MEED previously reported that Neom had approached developers and investors to discuss developing a PHS project that will be developed using an independent power producer (IPP) model.

Enowa received expressions of interest in bidding for the project from developers and contractors in January this year.

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

The other three planned PHS projects will be located in Al-Qimmah, Nima and Beach Mountain, and will have capacities of about 3,000MW, 1,000MW and 3,000MW, respectively.

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

The PHS 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.

A PHS 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