meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi Arabia’s power sector motors on

11 September 2024

 

Saudi Arabia’s power sector has sustained its project activity momentum over the past six months.

The principal buyer, Saudi Power Procurement Company (SPPC), awarded the contracts to develop two publicly-tendered wind independent power producer (IPP) projects, with a total combined capacity of 1,100MW, under the fourth round of the kingdom’s National Renewable Energy Programme (NREP).

The Public Investment Fund (PIF), responsible for procuring through direct negotiations 70% of the kingdom’s 2030 target renewable energy capacity, let three large-scale solar photovoltaic (PV) projects with a total combined capacity of around 5,500MW.

State majority-owned Saudi Aramco also awarded a contract to develop an independent cogeneration project with an electricity generation capacity of 475MW.

During the same period, SPPC began the tendering process for two combined-cycle gas turbine (CCGT) projects, the Remah and Nairiyah IPPs, each with a capacity of 3,600MW, and for four solar PV schemes with a total combined capacity of 3.7GW under the NREP fifth round.

“It has been a very busy summer,” notes a senior executive with an international utility developer, referring to the submission of bids in August for the contracts to develop the Remah 1 & 2, Nairiyah 1 & 2, and the NREP round-five solar PV schemes.

Notably, the principal buyer has initiated the selection process for consultants who will advise on its next pair of independent CCGT power plants – the 2,400MW Al-Rais and the 3,600MW Riyadh 16 projects.

Saudi Electricity Company (SEC) and SPPC are also understood to be conducting bilateral talks for the development of five CCGT power plants, which, along with those currently being built or tendered, support the kingdom’s mandate to replace fleets running on liquid fuel.

Essentially, the reported SEC projects, each with a capacity of 1,500MW-2,000MW, bear some similarities to PIF’s directly negotiated renewable energy schemes.

These projects help substantiate previous reports that SEC has been seeking to lock in gas turbine equipment deals with a total capacity of 30GW, in line with an overall capacity expansion plan within and outside Saudi Arabia.

The next few years can only get busier, with Saudi Arabia's Energy Minister, Prince Abdulaziz Bin Salman Bin Abdulaziz Al-Saud, confirming in June plans to tender 20,000MW of renewable energy projects annually starting this year, in line with reaching 100GW-130GW of installed capacity by 2030, "depending on electricity demand growth".

This represents a major upward revision to the official 2030 renewable energy capacity target of 58,700MW.

However, it is unclear if this new target considers the renewable capacity that will be installed to power Neom, Saudi Arabia’s largest gigaproject, as well as the requirement of green hydrogen projects that the PIF plans to codevelop.

Wind IPPs

In May, SPPC awarded a team led by Japanese utility developer Marubeni Corporation the contracts to develop the 600MW Al-Ghat wind and 700MW Waad Al-Shamal wind IPPs.

The team of Marubeni and its partner, the local Alajlan Brothers, is also expected to win the contract to develop the 700MW Yanbu wind IPP, the final wind scheme included in NREP’s round four.

These are important awards for Marubeni, which last won an IPP contract in Saudi Arabia in 2021 for the 300MW Rabigh solar scheme.

Notably, the Al-Ghat and Waad Al-Shamal wind IPPs will be developed at world-record-low levelised electricity costs of $c1.565 a kilowatt-hour (kWh), or roughly 5.87094 halalas/kWh, and $c1.70187/kWh or 6.38201 halalas/kWh.

PIF projects

In June, three Saudi utility developers and investors signed power-purchase agreements (PPAs) with SPPC to develop and operate three solar PV projects with a combined capacity of 5,500MW.

The Haden and Muwayh solar PVs, located in Mecca, will each have a capacity of 2,000MW, while the Al-Khushaybi solar PV power plant in Qassim will be able to generate 1,500MW of electricity.

The team that will develop the three projects consists of Acwa Power, PIF-backed Water & Electricity Holding Company (Badeel) and Saudi Aramco Power Company (Sapco), a subsidiary of the state majority-owned oil giant.

The project companies formed for each solar IPP have since signed financing documents for the projects, which will require a total investment of SR12.3bn ($3.3bn). The financing sought was $2.6bn.

These projects comprise round four of PIF’s Price Discovery Scheme, with Acwa Power as the preferred developer partner.

Energy storage systems

The scale of new conventional and renewable energy capacity being developed in the kingdom – some 3,500MW of solar PV and wind capacity is now online, with over 10,500MW under construction – has increased the urgency to build energy storage systems to balance the kingdom’s energy system and stabilise its grid.

SPPC has signalled plans to procure gigawatt-sized battery energy storage systems (bess) using an IPP model. The tendering process for the first bess IPP package is expected to begin by the year-end or early 2025.

In parallel, National Grid Saudi Arabia, an SEC subsidiary, has started awarding contracts to build energy storage systems capacity using an engineering, procurement and construction (EPC) model. The local Algihaz Holding is understood to have won the contracts to build four energy storage systems in Najran, Madaya and Khamis Mushait, which will have a total combined capacity of 7.8 gigawatt-hours (GWh).

Also in August, SEC tendered contracts for the construction of five battery energy storage systems with a total combined capacity of 2,500MW, or roughly 10GWh.

The planned facilities, each with a capacity of 500MW or roughly 2GWh, are located in or within the proximity of the following key cities and load centres:

  • Riyadh
  • Qaisumah
  • Dawadmi
  • Al-Jouf
  • Rabigh

Saudi Arabia’s plan to build its first large-scale nuclear power plant in Duwaiheen, which appeared to be making progress before October last year, has faced delays following shifting geopolitics involving stakeholders that include the US and Israel. The tender bid deadline for nuclear technology providers is understood to have been postponed and no new date has been set.

As it is, Saudi Arabia’s ever-expanding power projects pipeline, particularly for renewables and bess, will require investors, contractors and lenders to allocate sizeable resources, perhaps more than they have historically done in the past, over the next several years as various stakeholders endeavour to meet Vision 2030-tied peak demand scenarios.

This applies less to CCGT projects, which, pending a clear carbon-capture strategy from the offtaker or the Energy Ministry, appear to attract a decreasing number of developers and investors.

https://image.digitalinsightresearch.in/uploads/NewsArticle/12496716/main.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Egypt approves plans for 869MW wind power plant

    22 June 2026

    Egypt’s Cabinet has approved plans for French renewable energy developer Voltalia to develop an 869MW wind power project.

    The scheme will be built on land allocated by the New & Renewable Energy Authority (NREA), according to a statement posted by the Cabinet following its most recent weekly meeting.

    Voltalia will make an initial investment of $53m and has committed to achieving commercial operations by December 2028.

    Voltalia already operates the 32MW Ra solar plant at the Benban solar complex in Aswan and is expanding its renewable energy portfolio in Egypt.

    Previously, in 2024, it signed a framework agreement with Egypt’s Taqa Arabia to develop a green hydrogen and renewable power cluster near the Ain Sokhna port in the Suez Canal Economic Zone.

    The green hydrogen development is planned in two phases, each centred on a 500MW electrolyser powered by more than 1.3GW of renewable generation capacity. The project, still in its early stages, is expected to produce up to 350,000 tonnes of green ammonia a year.

    Voltalia’s partnership with Taqa Arabia also includes plans for a 3.2GW hybrid wind and solar project to repower the existing 545MW Zafarana wind farm in Suez Governorate. The Cabinet statement did not indicate whether the newly approved 869MW wind project forms part of that proposal.

    Meanwhile, the developer won another contract, earlier this year, to develop a 132MW solar power project in Tunisia’s Gabes region.

    The project, known as Wadi, marked Voltalia’s third major solar award in the country after the Sagdoud and Menzel Habib projects awarded in 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17376730/main.jpg
    Mark Dowdall
  • Local firm signs Jeddah drainage contracts

    22 June 2026

    Local contractor Alkhorayef Water & Power Technologies (AWPT) has announced it has signed two contracts with Jeddah Municipality to operate and maintain stormwater and surface water drainage networks across the city.

    The contracts have a combined value of SR202.06m ($53.9m), and each will run for five years.

    The first contract, valued at SR108.46m ($28.9m), covers the operation and cleaning of stormwater and surface water networks in the South and Al-Malisa sub-municipalities.

    The second contract, worth SR93.59m ($25m), covers similar services for the Airport Sub-Municipality.

    In March, MEED reported that the firm had won a long-term contract to carry out work in the airport’s sub-municipality area. The agreement was signed on 16 June.

    Elsewhere, construction has yet to begin on phases one and two of the King Abdullah Road-Falasteen Road tunnel project, each valued at about $175m.

    According to sources, Jeddah Municipality selected Saudi contractor Thrustboring Construction Company to build the large-diameter stormwater drainage tunnels in 2025. However, an official agreement has yet to be signed.

    The municipality was also previously planning to rehabilitate the existing Al-Zahra pumping station. Prequalification for the project began in 2020; however, it is understood that the main contact tender was cancelled last year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17376097/main.jpg
    Mark Dowdall
  • Saudi firm signs Uzbekistan water treatment PPP

    22 June 2026

    Saudi-listed Miahona has signed a public-private partnership agreement to enhance, operate and maintain Uzbekistan’s Zomin water treatment plant in the country’s Jizzakh region.

    The agreement was signed on 18 June with Uzsuvtaminot, the country’s state-owned water utility, the developer said in a filing with the Saudi stock exchange.

    Miahona will carry out enhancement works and 25 years of operation and maintenance services for the existing plant, which has a design treatment capacity of 50,000 cubic metres a day

    The contract marks the company’s entry into Uzbekistan’s water sector. According to the disclosure, it will enter into force once a project-related governmental decree is issued in accordance with Uzbekistan’s applicable legislation.

    The contract is estimated at $105m (SR395m), with a final value to be confirmed following the issuance of the governmental decree.

    MEED reported earlier this month that Uzbekistan had stepped up its engagement with Middle Eastern investors, including holding talks with Saudi Arabia’s Acwa and Vision Invest on renewable energy, water management, waste recycling, digital infrastructure and urban utility projects.

    The government also recently held discussions with a UAE delegation led by Suhail Mohamed Al-Mazrouei, minister of energy and infrastructure and chairman of Etihad Water & Electricity’s Board of Directors.

    At the Tashkent International Investment Forum, it signed a €197m financing package with Germany’s KfW Development Bank to support drinking water supply and wastewater projects in the Surkhandarya and Fergana regions.

    The projects will cover Termez and several district centres in Surkhandarya region, as well as Kokand and Margilan in Fergana region.

    This includes “the construction and reconstruction of hundreds of kilometres of drinking water and wastewater networks, pumping stations and modern wastewater treatment facilities”, deputy prime minister Jamshid Khodjaev said.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17375811/main.jpg
    Mark Dowdall
  • Qiddiya seeks contractors for indoor arena project

    22 June 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabian gigaproject developer Qiddiya Investment Company (QIC) has invited contractors to prequalify for a contract to build an indoor sports arena within its Qiddiya entertainment city project.

    The invitation was issued on 21 May, with a submission deadline of 28 June.

    The multipurpose arena is designed to International Olympic Committee standards.

    It will be located in District 18, in the Uptown South area of Qiddiya.

    Once completed, the indoor arena will be capable of hosting a wide range of sports, cultural and entertainment events.

    The arena will feature numerous sports courts for basketball, handball, futsal, volleyball, tennis, boxing and gymnastics.

    It will have a seating capacity of 18,000 spectators.

    The project is scheduled for completion by 2030.

    QIC’s other major projects include an e-sports arena, the National Tennis Centre, Prince Mohammed Bin Salman Stadium, a motorsports track, a racecourse, the Dragon Ball and Six Flags theme parks, and Aquarabia.

    QIC opened the Six Flags theme park to the public in December last year.

    The park covers 320,000 square metres and features 28 rides and attractions, including 10 thrill rides and 18 aimed at families and young children.

    The Qiddiya project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17375504/main.jpg
    Yasir Iqbal
  • Egypt signs gas deal with Harbour Energy

    22 June 2026

    Egypt’s Ministry of Petroleum & Mineral Resources has signed a new agreement with London-headquartered Harbour Energy.

    Under the scope of the agreement, Harbour Energy will drill two new exploration wells and carry out maintenance work for one of the existing wells within the Dsouq-1 development contract.

    Harbour Energy committed an initial $6m investment and a $1m signing bonus for the Dsouq concession. Total investment could rise to $18m if commercial discoveries are made.

    The signing was witnessed by Egypt’s Minister of Petroleum, Karim Badawi.

    He said that his ministry is continuing to implement a package of investment measures and incentives aimed at encouraging partners to increase investments and intensify exploration, development and production activities.

    The agreement was signed by Syed Saleem, a member of the executive branch of the state-owned Egyptian Natural Gas Holding Company (EGAS), and Samah Sabry, the executive director of Harbour Energy for the Middle East and North Africa region.

    Harbour Energy drilled two new wells in Egypt during the fiscal year 2025/2026, resulting in the addition of reserves estimated at 35 billion cubic feet of gas.

    The company aims to drill three new exploration wells during the fiscal year 2026/2027.

    Egypt is currently pushing to boost the production of both oil and gas in its territory.

    Earlier this month, Egypt’s Ministry of Petroleum & Mineral Resources announced that it had fully settled all outstanding arrears owed to oil and gas companies.

    Two years ago, in June 2024, the country owed approximately $6.1bn to partners in the oil and gas sector.

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

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17374536/main4731.jpg
    Wil Crisp