meed-logo

line1 line2 line3
SIGN IN / REGISTER

Riyadh rides power projects surge

7 September 2023

This package on Saudi Arabia's power sector also includes: 

> Israeli talks decisive for Saudi nuclear programme
> Jinko outprices other bidders for Tubarjal solar contract
> Synergy wins 7.2GW Saudi advisory role
> Team submits lowest Hinakiyah solar bid
> Saudi offtaker holds Taiba and Qassim bidder meetings
> Saudi Arabia confirms Shuaibah financial close

 

Recent months have been busier than usual for the Saudi power generation sector. Riyadh’s plan to build its first large-scale nuclear power plant has gathered momentum, with the tendering process under way for the project’s main contract.

In May, the Public Investment Fund (PIF) awarded three solar photovoltaic (PV) power plant contracts with a total combined capacity of 4,550MW.

In August, utility developer Acwa Power reached financial close for the Shuaibah 1 and Shuaibah 2 solar PV independent power producer (IPP) projects, which have a total combined capacity of over 2,600MW.

French energy heavyweight TotalEnergies has also reached financial close for the 120MW Wadi al-Dawasir solar scheme, tendered under round three of the kingdom’s National Renewable Energy Programme (NREP).

During the past few months, the state-backed power offtaker, Saudi Power Procurement Company (SPPC), has received proposals and shortlisted two bidders each for the two solar PV contracts under NREP’s round four.

Riyadh has also accelerated the procurement of gas-fired capacity over the past year.

SPPC is simultaneously evaluating bids for four combined-cycle gas turbine (CCGT) plants, the Taiba 1 and 2 and Al-Qassim 1 and 2 IPPs, which have a total combined capacity of 7,200MW.

In addition to the potential award of these four contracts over the next few months, the state offtaker is expected to tender two more gas-fired projects – the PP15 IPP in Riyadh and another power generation plant in Al-Khafji – next year. Each will have a design capacity of 3,600MW.

Overall, close to $30bn-worth of power generation projects are in execution or about to start construction in Saudi Arabia, according to the latest data from MEED Projects. 

At least $44bn are in the pre-execution phase, excluding the kingdom’s $35bn nuclear power plant programme.

Liquid fuel displacement

Given the kingdom’s ambitious plan to boost its renewable energy installed capacity to 58,700MW by 2030, up from about 1,100MW today, the pace of renewable energy contract awards is no surprise.

CCGT projects support the kingdom’s plan to cut down on burning liquid fuels. The Energy Ministry’s liquid fuel displacement programme, launched as part of Saudi Vision 2030, aims to displace 1 million barrels a day of liquid fuels across the utilities, industry and agriculture sectors by 2030.

The latest data from the King Abdullah Petroleum Studies & Research Centre (Kapsarc) shows that liquid fuels, comprising crude oil, heavy fuel oil and diesel, accounted for up to 43 per cent of Saudi Arabia’s fuel mix for power generation and water desalination processes as of 2018.

This translates to about 1,670 trillion BTUs, roughly equivalent to 760,000 barrels a day, of liquid fuels.

Meanwhile, natural gas consumption across the kingdom’s power generation and water desalination sectors is estimated at 2,226 trillion BTUs, or 6 billion cubic feet a day.

Kapsarc research fellow Rami Shabaneh noted in a 2020 report: “Overall fuel consumption saw a significant decline of almost 8 per cent year-on-year in 2018. This was due to increased energy-efficiency regulations and energy price reforms.”

This trend – along with other energy-efficiency measures in the power generation, water desalination, and transmission and distribution network – suggests there has been a decrease in fuel consumption in the intervening years too.

However, much still needs to be done to reach the kingdom’s 2030 liquid fuel displacement target, as well as its energy diversification objectives.

While the massive expansion of gas-fired capacity seems inconsistent with cutting emissions, the significant number of fleets that still burn liquid fuel appears to justify the dual approach to expanding both renewable and gas-fired capacity to meet rising demand and security of supply.

“Plants running on highly efficient CCTG technologies is the way to go,” says an expert who works for an international utility developer.

This approach also dovetails with the kingdom’s goal for 50 per cent natural gas and 50 per cent clean or renewable energy in its energy mix by 2030.

Saudi’s ambition to achieve carbon neutrality by 2060 – 10 years later than typical targets – could also be advantageous in terms of procuring more efficient CCGT plants in the interim.

With the kingdom’s power-purchase agreements (PPAs) generally lasting 25 years, gas-fired IPPs procured this year and next will reach commercial operations by 2027 or 2028. This takes the validity of upcoming PPAs into the early 2050s, still well within the country’s energy transition period.

Different tunes

As things stand, not everyone is convinced of the need for the scale of the new natural gas fleet planned in the kingdom.

“I think they should focus more on renewables,” says a Dubai-based industry expert, who notes the large gap between Saudi Arabia’s current renewable energy installed capacity and 2030 target.

Given that renewable energy accounts for, roughly, just 1 per cent of known power generation installed capacity, 70-fold growth is needed to hit the end-of-the-decade target.

Some international utility developers, with internal carbon-neutrality deadlines of 2050 or before, may not be able to participate in the ongoing CCGT tenders, unless they integrate decarbonisation measures. This could affect the competitiveness of bid prices.

However, Paddy Padmanathan, former CEO of Saudi utility Acwa Power, says the kingdom has room for both technologies.

“I see no reason why a fast or even faster pace of renewable energy procurement cannot run in parallel with CCGT procurement,” he tells MEED.

“[The] Saudi procurement process, PPA risk allocation and certainty of projects moving forward to the timetable set out in the requests for proposals are well recognised and appreciated,” the executive, who is a member of Acwa Power’s board following his retirement as CEO earlier this year, explains.

Padmanathan says there is no shortage of equity and debt funding for these projects. He also cites the kingdom’s “very high” credit rating.

These factors, along with abating supply chain challenges for solar PV modules and the keenness of CCGT original equipment manufacturers for new contracts, mean the kingdom will continue to be an exciting market for power projects well into the next decade, Padmanathan asserts.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11115963/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Firms submit Jebel Ali sewage PPP prequalifications

    24 July 2026

     

    Dubai Municipality received statements of qualification on 23 July from firms interested in delivering phase three of the Jebel Ali sewage treatment plant (STP) expansion project.

    Known as DS150/3, the project will be delivered under a public-private partnership (PPP) model on a design, build, finance, own, operate and transfer basis.

    The project involves the development of a new water resource recovery facility with an ultimate treatment capacity of up to 1 million cubic metres a day (cm/d).

    It is being procured through Dubai Municipality’s sewerage and recycled water projects department and will be delivered via a two-stage operational approach over a 30-year concession period.

    It is understood that the following firms are among those likely to qualify for the project:

    • Acciona (Spain)
    • Alkhorayef (Saudi Arabia)
    • Besix (Belgium)
    • Etihad WE (UAE)
    • GS Inima (Spain)
    • Metito (UAE)
    • Miahona (Saudi Arabia) 
    • Samsung E&A (South Korea)
    • Saur (France)
    • Suez (France)
    • Taqa Water Solutions (UAE)
    • Veolia (France)

    The municipality issued a request for qualifications notice in May with an intial bid submission deadline of 18 June. UK-headquartered Deloitte is acting as financial adviser, Aecom is the project's technical adviser and CMS is the legal adviser.

    Dubai Municipality said the project will also include additional land uses and community-focused amenities as part of broader sustainability and urban integration objectives.

    Phase one and two expansion

    On 9 July, firms submitted bids for an engineering, procurement and construction contract covering the expansion of the Jebel Ali STP phases one and two.

    Located on a 670-hectare site in Jebel Ali, the original wastewater facility has a treatment capacity of about 675,000 cm/d, following the completion of phase two in 2019, combining approximately 300,000 cm/d from phase one and 375,000 cm/d from phase two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d, with the expansion estimated to cost $300m.

    UK-headquartered KPMG and UAE-based Tribe Infrastructure are serving as financial advisers on the project.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17735401/main.jpg
    Mark Dowdall
  • Contractors submit interest for Riyadh Expo substructure

    24 July 2026

     

    Contractors have submitted expressions of interest on 23 July for a contract to deliver the early works and substructure works for several assets at the Expo 2030 Riyadh site.

    Expo 2030 Riyadh Company (ERC) is tasked with delivering the Expo 2030 Riyadh venue. Saudi sovereign wealth vehicle, the Public Investment Fund, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for the event.

    The assets include the Icon; the convention centre; and thematic pavilions, including the Culture of Wisdom, Place & Planet and Adaptation & Innovation pavilions.

    The Icon will be located at the entrance of the Expo 2030 Riyadh site, within the Collaboration Precinct.

    The structure will be connected to the metro station and will serve as a gateway to the event.

    It will be 66 metres tall and will comprise an observation platform, food and beverage (F&B) outlets and other features.

    The convention centre will cover about 22,000 square metres. It will be the first point of arrival for visitors to the expo.

    The Culture of Wisdom pavilion will be a 25-metre-tall building that will feature exhibition galleries, innovation laboratories and conference and learning spaces.

    The Place & Planet building will also be 25 metres tall, and will include indoor and outdoor exhibition spaces, F&B and retail facilities and support areas.

    The Adaptation & Innovation pavilion will be located within the Loop of Nations precinct and will comprise a 29-metre-tall building.

    Construction progress

    The tendering of the pavilion structures followed progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor;
    • Lot 2 includes the northern cluster of the Nature Corridor;
    • Lot 3 comprises the southern cluster of the Nature Corridor. 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739044/main.jpg
    Yasir Iqbal
  • Oil price rises above $100 a barrel after Red Sea attacks

    24 July 2026

    Oil prices rose to their highest level in nearly two months on 23 July after the latest escalation in the US-Iran conflict threatened severe new disruptions to global energy supplies.

    Global benchmark Brent crude closed 7% higher, at $100.69 a barrel on 23 July. Earlier in the trading day, it rose as high as $102 a barrel. That is its highest level in eight weeks, since the end of May.

    Brent was trading at over $100 a barrel in the early hours of 24 July, but later pared gains to settle around $99.63 a barrel as of 11am Gulf Standard Time (GST).

    The surge in the Brent price came after Iran-backed Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea following their announcement of a naval blockade on Saudi Arabia.

    It appeared to be the first time since the regional war began that attacks on oil tankers and other commercial ships had extended beyond the Strait of Hormuz, opening up a new front in the volatile conflict.

    The Houthi threat is unsettling to oil markets because millions of barrels a day pass through the Bab El-Mandeb Strait to reach global markets.

    ALSO READ: Opec+ holds the line on unwinding of production cuts

    About 12%-15% of global maritime trade, worth more than $1tn, transits the waterway every year.

    It has also served as an alternative to the Strait of Hormuz, where traffic remains largely at a standstill, with ship crossings falling to single digits on 21 July.

    Since the start of July, oil prices have risen about 35%. Those prices are more than 60% higher than at the start of the year. This has erased much of the progress made in bringing prices down after the US and Iran signed a memorandum of understanding in mid-June.

    The interim peace deal has now collapsed, with US President Donald Trump threatening on 22 July to blow up an Iranian bridge or power plant for every vessel Tehran attacks.

    This was followed by the Houthi claim to have hit two tankers in the Red Sea.

    The UK’s Maritime Trade Office reported a tanker “struck by an unknown projectile” north of the Bab El-Mandeb Strait, and state-run Saudi Press Agency (Spa) reported that a vessel named Encelia was set ablaze by an attack while it was sailing overnight in the Red Sea, citing an unidentified source from the General Authority of Transport. Spa did not mention the other vessel, which is understood to be called Layla.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739553/main4051.jpg
    Indrajit Sen
  • Qiddiya tenders Dragon Ball theme park package

    24 July 2026

     

    Qiddiya Investment Company (QIC) has tendered a contract to undertake the back-of-house works on the Dragon Ball theme park in Qiddiya, Saudi Arabia.

    The scope covers the construction of plant rooms, facilities management buildings, workshops, storage warehouses and central processing kitchens.

    It also includes a monorail service depot, a fire station, parking, utilities and other associated infrastructure.

    The bid submission deadline is 13 September.

    The Dragon Ball theme park will cover more than 500,000 square metres and will have seven themed zones inspired by the Japanese media franchise, including Kame House, Capsule Corporation and Beerus’ Planet.

    The park will offer more than 30 rides with five main attractions, including a rollercoaster that passes through a 70-metre landmark based on the series’ wish-granting dragon Shenron. 

    The development will also include themed hotels.

    In September 2024, US-based firm Falcon’s Creative Group announced that it is undertaking the masterplan and attraction design and is the creative lead for the theme park.

    QIC formally launched the Dragon Ball theme park in March 2024.

    The announcement came after QIC signed an agreement with Japanese firm Toei Animation, the producer of the Dragon Ball anime series.

    The Dragon Ball theme park is one of several major projects within the wider Qiddiya development. Other projects include an e-games arena, Prince Mohammed Bin Salman Stadium, a horse racing venue, a performing arts centre, the Speed Park and Six Flags theme parks and Aquarabia waterpark.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to UK analytics firm GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17738622/main.jpg
    Yasir Iqbal
  • Saudi Arabia appoints developer for hybrid power plant

    24 July 2026

     

    Saudi Arabia-based Lamar Holding has signed a contract to develop a hybrid power plant at the Empty Quarter (Rub Al-Khali) land port in Saudi Arabia, according to a source.

    The public-private partnership (PPP) project aims to reduce diesel fuel use with renewable energy and ensure a long-term power supply at the Empty Quarter land port. It includes the construction of 15MW of total hybrid installed capacity, installation of a 7 megawatt-peak solar photovoltaic system and eight 1MW internal combustion engines.

    In March, MEED exclusively reported that Lamar had been given preferred bidder status and was in advanced discussions with Saudi Arabia’s Zakat, Tax & Customs Authority (Zatca) for the contract.

    MEED understands that the proposed plant will have the capacity to produce 25 gigawatt-hours of electricity annually. It will be implemented under a design, build, finance, operate, maintain and transfer contract model for 25 years, excluding the construction period.

    US/India-based Synergy Consulting is acting as financial advisor to Lamar on the project. Egyptian firm Eternal Consultation Engineering Services is acting as the technical support consultant and Dubai-headquartered Aktech is the technical consultant for the project.

    Lamar Holding and Dubai’s SirajPower submitted bids for the Empty Quarter hybrid power plant project in July 2025, as previously reported by MEED.

    Zatca, in collaboration with the National Centre for Privatisation & PPP, had previously prequalified the following four companies to bid for the contract in October 2024:

    • Alfanar Company (Saudi Arabia)
    • Lamar Holding (Saudi Arabia)
    • Olayan Energy (Saudi Arabia) / Enerwhere Sustainable Energy (UAE)
    • Siraj Power for Renewable Energy (UAE)

    Prior to that, in July 2024, 12 Saudi companies and local branches of international companies, along with 11 overseas-based companies, submitted statements of qualifications for the contract.

    In addition to building and operating the power plant, the project scope includes ensuring the facility operates to defined requirements and output specifications. It also involves managing power generation and the connection to the Zatca interface point for the entire project term.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17733327/main.jpg
    Mark Dowdall