Meed | Saudi power projects hit record high

Saudi power projects hit record high

21 February 2025

Saudi Arabia has entered what could be the busiest period for power generation capacity buildout in its history.

According to data from regional projects tracker MEED Projects and MEED, power generation projects with a total capacity of 53GW are under construction, or are about to start construction following the formal award of contracts or the selection of bidders.

Generation and cogeneration plants powered by natural gas account for two-thirds, or 66.7%, of the total capacity under construction, with renewable energy plants – mainly solar – accounting for the rest.

Solar and wind power plants dominate the pre-execution pipeline, however, accounting for about 94% of the capacity that is currently under bid or prequalification.

The total thermal and renewable generation capacity being planned and tendered in Saudi Arabia, inclusive of projects in the study and design phases, stood at about 80GW as of February 2025.

The major capacity buildout is in line with the kingdom's liquid displacement programme, as well as its target for renewable energy sources to account for half its electricity production by 2030.

According to the Energy Institute, Saudi Arabia's total electricity generation in 2023 reached 422.9 terawatt-hours (TWh). Oil accounted for 152.1TWh, or about 36% of the total, while natural gas accounted for 265TWh, or 63%, and renewables made up 5.8TWh or 1%.

CCGT plants

The urgency of displacing the kingdom's oil-fired fleet underpins the successive contract awards for combined-cycle gas turbine (CCGT) power generation plants, which are being developed as independent power projects (IPPs) or via engineering, procurement and construction (EPC) contracts.

About 47% of the 35.8GW of gas-fired capacity that is under construction is being built via an EPC or design-and-build model, mainly by Saudi Electricity Company (SEC). The rest is being constructed using an IPP model.

Of the total thermal capacity under construction, about 45% will be generated by greenfield power plants that are being built as an expansion to existing power generation facilities in the kingdom.

Chinese contractors such as Sepco 3 and China Energy Engineering Corporation are among the firms constructing 10 of the 19 gas-fired power generation and cogeneration plants that are under execution in Saudi Arabia. An 11th plant is being constructed by Sepco 3 in partnership with Doosan Enerbility of South Korea. The 11 plants equate to a capacity of about 21GW.

South Korean contractors – primarily Doosan and Samsung C&T – are involved in four of the 19 projects.

"I think the Chinese EPC contractors are already at capacity, so SEC has started tapping Egyptian and Spanish EPC contractors," an industry source tells MEED, in reference to Tecnicas Reunidas, Orascom and Elsewedy, which were selected last year to undertake the EPC contracts for several CCGT plants.

The peak for new gas-fired contract awards may have passed, however.

Data from MEED Projects indicates that four cogeneration plants with a combined capacity of about 1.5GW are in the pre-execution stage. Meanwhile, at least two gas-fired IPP schemes – Shoaiba and Al-Shuqaiq – are currently under study, each with a planned capacity of 2.6GW.

However, the possibility of an unexpected new project, like the 3GW expansion of the Qurayyah IPP, which was announced on 20 February, cannot be ruled out.

Renewables

A reverse trend could be seen for renewable solar power generation capacity.

As of February 2025, nearly all renewable energy capacity under construction in Saudi Arabia is being developed as IPPs.

About 43% of these IPPs are publicly tendered by the principal buyer, Saudi Power Procurement Company (SPPC). The rest are directly negotiated by Saudi sovereign wealth vehicle the Public Investment Fund (PIF) and the dominant local utility developer, Acwa Power.

The pre-execution pipeline for solar and wind energy projects that will be procured by SEC and gigaproject developer Neom is extensive, especially given that the Energy Ministry has issued a directive that up to 20GW of renewable energy capacity be procured annually until 2030, subject to demand growth.

"It is a massive pipeline," notes a Dubai-based senior transaction adviser.

However, he also notes that a re-scoping process is under way, especially for renewable energy projects that are designed to cater to Neom, the $500bn development in northwestern Saudi Arabia, which aims to be powered 100% by renewables by 2030.

Issues related to land allocation may also arise, if they haven't already, notes another industry expert.

The deployment of additional renewable energy capacity also requires a major battery energy storage system buildout. Efforts towards this got under way last year to ensure the flexibility of the electricity grid.

"The question is how many batteries they will need and how many batteries will be available to support that ambition," the source said.

Data centres

In addition to the liquid displacement programme and the 50% renewable energy production target by 2030, Saudi Arabia has been seeing a major uptick in data centre construction projects, in line with a plan to become a major artificial intelligence (AI) hub.

Hyperscalers such as Amazon Web Services, Google and Microsoft plan to expand their digital or cloud infrastructure in Saudi Arabia in line with this strategy. These and other AI players, as well as local firms such as DataVolt, Ezditek, Alfanar and the UAE-based Gulf Data Hub, pledged about $15bn of investments in this type of infrastructure during the Leap technology conference, which took place in Riyadh on 9-12 February. More investments are expected to be announced in the coming months and years.

These projects, assuming they all come to fruition, will significantly increase computing, cooling and overall electricity demand. The need to make these advanced data centres as sustainable as possible will also further incentivise the kingdom's national renewable energy programme.

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Jennifer Aguinaldo

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Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

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T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Contractor wins $105m Medina university hospital deal

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Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

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Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

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

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Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

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> INTERVIEW: Emsteel persists with business productivity and efficiency

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Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

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Kuwait halves drilling contractor pool
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State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
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- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
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- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
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- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

Register for MEED’s 14-day trial access

Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.