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
  • Combined Group signs Kuwait upstream contract

    4 November 2026

    Register for MEED’s 14-day trial access 

    Kuwait-headquartered Combined Group Contracting Company has signed a contract to repair and revamp production facilities in West Kuwait, according to a company statement.

    State-owned upstream operator Kuwait Oil Company (KOC) awarded the contract, valued at KD9.7m ($31.4m).

    The contract has a five-year term.

    KOC issued the invitation to bid on 5 October 2025. The initial bid deadline was 4 January 2026, and a pre-tender meeting was scheduled for 4 November 2025.

    The contract award to Combined Group was approved on 13 September 2026.

    Kuwait’s oil and gas sector is currently in the midst of a major crisis, as disruptions to shipping through the Strait of Hormuz have dramatically reduced exported crude oil volumes.

    The disruptions are the result of a regional war that started on 28 February when the US and Israel attacked Iran.

    The disruptions to shipping in the Strait of Hormuz are also creating significant challenges for oil and gas construction projects, which normally import equipment and materials through the waterway.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21120792/main.png
    Wil Crisp
  • Aramco Q3 profit rises 9% despite attacks on facilities

    3 November 2026

    Register for MEED’s 14-day trial access 

    Saudi Aramco reported a 9% year-on-year increase in adjusted net income to $31.2bn in the third quarter of 2026, supported by stronger financial performance across its businesses, particularly downstream operations, and despite persistent attacks by the Yemen-based Houthi rebels on its facilities across the kingdom.

    The company’s revenue and other income from sales reached $140.492bn in Q3 2026, up from $111.509bn in the same period last year. 

    Downstream adjusted earnings before interest and taxes (ebit) increased by 234% year-on-year, reflecting stronger refining margins.

    Cash flow from operating activities increased to $38.7bn in Q3, compared to $36.1bn a year earlier, while free cash flow rose to $28.2bn from $23.6bn over the same period.

    The company maintained a gearing ratio of 5.5% at the end of the first nine months of the year, compared to 6.2% at the end of the first half of the year.

    Return on average capital employed in Q3 remained the same as in the previous quarter at 22.1%.

    Aramco’s capital expenditure in Q3 2026 declined to $10.52bn from $12.55bn in the same period last year, while capex in the first nine months of the year stood at $35.78bn.

    Commenting on the Q3 financial results, Aramco’s president and CEO, Amin H Nasser, said: “Geopolitical uncertainty and attacks on key energy facilities continued to amplify the global energy supply crisis in the third quarter of 2026, with serious implications for global energy security.

    “Despite challenges, the unwavering dedication of our workforce, our operational excellence, the flexibility of our system and the strength of a supply network built over decades enabled us to continue delivering reliably to our customers through this extraordinary period.

    “We continue to explore additional overseas storage capacity and alternative export routes to further strengthen our global supply network, and our robust operational and financial performance during this volatile period demonstrates the value of our resilience.

    “Backed by our strong balance sheet, we remain focused on the disciplined execution of priority projects and on leveraging advanced technologies to enhance performance and unlock new opportunities. This is how we will continue to meet the world’s evolving energy needs and deliver value for our shareholders and customers.”

    ALSO READ: Sabic swings back to profit in Q3 with $224m net income

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21121169/main.jpg
    Indrajit Sen
  • UAE monitors desalination plants after oil spill

    3 November 2026

    State utility Etihad Water & Electricity (EtihadWE) says it is monitoring seawater quality at desalination plant intake points following an oil spill off the UAE's northern coast.

    In a statement, the utility said it is continuing to "implement proactive measures to safeguard the water production system" following the spread of an oil slick towards coastal areas in the emirates of Umm Al-Quwain, Ras Al-Khaimah, Ajman and Sharjah.

    The spill involved the tanker Gem No. 2, which was struck by a projectile in UAE territorial waters on 9 October. The resulting oil pollution has raised concerns over potential contamination of seawater used by desalination plants along the northern coast.

    EtihadWE said its measures include continuous monitoring of seawater quality at plant intake points, regular testing of produced and distributed water, and verification of compliance with approved standards before water enters the distribution network.

    The utility added that the precautionary measures will not affect the continuity of water supplies to consumers in the Northern Emirates.

    In an earlier update on 30 October, the Climate Change & Environment Ministry said the oil slick was concentrated off the coast of Umm Al-Quwain, extending partially towards coastal areas in Ras Al-Khaimah, Ajman and Sharjah.

    The ministry said the concentration of pollution had declined significantly and that the leak had been stopped at source. However, surveying, monitoring and clean-up operations are continuing in affected coastal areas.

    The Energy & Infrastructure Ministry said specialised technical teams are continuing work to address technical issues with the tanker, including repairing damaged sections, restoring operational systems and assessing the integrity of its structure.

    The proximity of the oil slick to the Naqa'a desalination plant in Umm Al-Quwain has drawn particular attention. According to media reports, the slick approached to within approximately 2 kilometres of the facility.

    Naqa'a has a production capacity of 150 million imperial gallons a day, equivalent to approximately 682,000 cubic metres a day. The plant supplies water to the Northern Emirates and has been operational since 2022.

    It is owned by Naqa'a Desalination Plant, a special-purpose vehicle established by Mubadala, Acwa and the former Federal Electricity & Water Authority, now known as EtihadWE.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21104534/main3427.jpg
    Mark Dowdall
  • Oman signs 1GW battery storage agreement

    3 November 2026

    Oman's Nama Holding, a subsidiary of Oman Investment Authority (OIA), has signed a framework agreement with China's State Grid International Development to develop battery energy storage systems (bess) with a targeted capacity of 1GW.

    The agreement covers two battery storage systems, each with a capacity of 500MW, at Duqm Industrial Station and Al-Subaikhi (Ibri Solar 3) Station.

    It is understood that both systems will operate at 400kV and connect to Oman's national electricity transmission grid.

    The deal is part of a package of economic and investment agreements signed by OIA with Chinese institutions and companies during the Oman-China conference on 2 November. OIA put the combined value of the bess projects at approximately RO384.5m ($1bn).

    The agreement comes as Oman advances plans to expand its renewable energy capacity and strengthen the electricity transmission network.

    Nama Power & Water Procurement Company is also procuring a separate 950MW standalone bess programme comprising five facilities in the sultanate, as MEED exclusively reported.

    The wider package of agreements, signed during Sultan Haitham Bin Tariq's state visit to China, covers sectors including renewable energy, mining, logistics, digital transformation and space technology.

    In the wind energy sector, Oman's O-Green and Shanghai Electric Wind Power signed a strategic partnership to establish a joint research and development centre and wind turbine testing facility at the Mawarid turbine factory in Duqm.

    The partnership will focus on adapting turbine technologies to Gulf climate conditions, supporting local manufacturing and developing green ammonia projects in Oman.

    The partnership is valued at RO3.85m-RO7.69m ($10m-$20m). It also identifies potential future contracts exceeding $1bn, alongside green ammonia projects and initial investment commitments in Oman exceeding $200m.

    In solar, OIA signed a preliminary term sheet with Chinese firms PCG Power and Hoymiles for a partnership valued at RO38.45m ($100m).

    The partnership aims to develop solar energy projects in Oman and establish a solar inverter manufacturing facility serving markets in the Middle East and North Africa.

    It is also intended to support the localisation of solar-related industries, expand domestic production and develop export markets.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21102638/main.jpg
    Mark Dowdall
  • Consultants bid for Roshn’s north Riyadh scheme

    3 November 2026

     

    Saudi gigaproject developer Roshn Group has received proposals from lead design consultants for its planned flagship development in north Riyadh.

    Consultants submitted proposals on 1 November for detailed design, tender documentation and construction documents for the project’s first plot.

    The planned development covers 13.7 square kilometres and will be a residential-led mixed-use scheme containing retail, office, hospitality, education and civic facilities.

    The consultancy scope for plot one includes infrastructure, utilities, public-realm works and the site adaptation of Roshn’s residential prototypes. It has been divided into two work packages.

    The first package covers phases A, B and E, which cover about 7.8 million square metres (sq m) and will include 17,000 units.

    The second package covers phases C and D, covering about 4.7 million sq m and with more than 15,000 units.

    The site is bordered by the Expo 2030 site, King Abdulaziz Park, the Sports Innovation Lab Zone and National Housing Company’s Khozam development.

    Transport connectivity is a key element of the masterplan. Two metro stations are planned, including a station at the interchange between the existing Line 4 and planned Line 7, and a dedicated Line 7 station. The development could also be served by the planned Qiddiya high-speed rail link and a potential diversion of King Salman Road.

    The scheme will add to Roshn’s existing development pipeline in Riyadh, which includes the multi-phase Sedra community. The developer is expanding its focus from single-family housing to larger mixed-use districts under its Roshn 3.0 strategy.

    Last month, Roshn signed a preliminary agreement with TMG Saudi, the local subsidiary of Egypt’s Talaat Moustafa Group, to establish a joint venture to explore a separate mixed-use project in Riyadh.

    TMG Saudi will hold a 51% stake in the proposed joint venture and Roshn will hold the remaining 49%. The companies said they will undertake detailed masterplanning and prepare a business case for the project, which preliminary studies indicate could include more than 55,000 residential units.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21101503/main.jpg
    Yasir Iqbal