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Saudi Arabia starts independent energy storage prequalifications

5 November 2024

Principal buyer Saudi Power Procurement Company (SPPC) has invited companies to prequalify for the first group of battery energy storage system (bess) projects to be tendered under a build-own-operate (BOO) model in Saudi Arabia. 

The group one bess – also called independent storage provider (ISP) – projects will comprise the following schemes with a total combined capacity of 2,000MW, which equates to about four hours or 8,000 megawatt-hours (MWh) of storage:

  • Al-Muwyah bess ISP: 500MW (Mecca)
  • Haden bess ISP: 500MW (Mecca) 
  • Al-Khushaybi bess ISP: 500MW (Qassim)
  • Al-Kahafa bess ISP: 500MW (Hail)

Each project will be developed under a BOO model with the successful bidder holding 100% equity in the special purpose vehicle (SPV) set up to develop and operate each ISP.

The SPVs will enter into a 15-year storage services agreement with the principal buyer.

According to SPPC, the newly launched energy storage programme enables reaching 50% of renewable energy in the kingdom’s energy mix by 2030 while enhancing the reliability and resilience of the electric power system.

MEED reported in May this year that SPPC was several months away from seeking interest from developers for the contract to develop and operate the 2,000MW first phase of an energy storage system catering to kingdom's electricity grid.

It is understood that SPPC plans to procure up to 10,000MW of bess capacity by 2030.

The principal buyer conducted a market-sounding event for the project in December 2023, in line with a plan to launch the procurement process for one-fifth of this capacity this year.

The planned bess facilities are to be built near demand centres. They will boost the electricity grid's spinning reserves as more renewable energy enters its electricity production mix.

Bess comprises rechargeable batteries that can store and discharge energy from various sources when needed. It is one of the key solutions being considered to address the intermittency of renewable energy sources.

US/India-based Synergy Consulting is advising SPPC on the energy storage capacity procurement programme.

Growing renewable capacity 

Saudi Arabia, through SPPC, publicly tendered about 10,370MW of renewable energy capacity under the first five rounds of the National Renewable Energy Programme (NREP) between 2017 and 2023.

Solar photovoltaic (PV) independent power projects (IPPs) account for 79% of the total tendered capacity, or about 8,170MW. Wind IPPs account for the remaining capacity.

At least four of the awarded schemes are now operational: the 300MW Sakaka solar PV, the 400MW Dumat Al-Jandal wind, the 300MW Rabigh solar and the 300MW Saad solar IPP projects.

Another scheme, the 1,500MW Sudair solar farm, procured by the Public Investment Fund under the Price Discovery Scheme and directly negotiated with Saudi utility provider Acwa Power, is also operational.    

The prequalification process is under way for wind and solar IPPs with a total combined capacity of 4,500MW under the sixth round of the NREP.

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Jennifer Aguinaldo

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