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.
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Saudi Arabia’s private sector steps up4 March 2026
-
Read the March 2026 MEED Business Review3 March 2026
-
Firms prepare Port of Duqm consultancy bids3 March 2026
-
Diriyah awards Pendry superblock package3 March 2026
-
Local firm to develop $598m Muscat tourism project3 March 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Saudi Arabia’s private sector steps up
4 March 2026
Commentary
Colin Foreman
EditorRead the March issue of MEED Business Review
At the Future Investment Initiative (FII) in Riyadh in 2019, a head of a regional family business voiced a guarded concern. The worry was that the scale and speed of the Public Investment Fund’s (PIF’s) projects were crowding out the private sector, leaving little space for traditional players to compete.
Fast forward more than six years and much has changed. In 2026, the era of the PIF acting as the principal driver for development is giving way to a new phase where the private sector is taking a more active role.At February’s Private Sector Forum (PSF), officials acknowledged that the kingdom’s priorities have evolved since 2016. This has led to reprioritisation, including the indefinite postponement of the 2029 Asian Winter Games in Trojena and the scaling back of projects such as The Line – moves framed as strategic adjustments amid global economic uncertainty.
With the 2034 Fifa World Cup and Expo 2030 on the horizon, alongside the rapid ascent of artificial intelligence, Riyadh is right to realign its capital. It is far more reassuring to see a government adapt its strategy to a changing global economy than to blindly pursue an outdated plan. The PIF, now managing $913bn in assets, is seeking ‘escape velocity’, allowing sectors such as tourism and real estate to stand independently.
The private sector is beginning to respond. Recent agreements signed at the PSF – ranging from King Salman International airport’s mixed-use developments to Roshn’s logistics partnership with Agility – show that local and regional firms are rising to the challenge.
There is still work to be done. Some sectors are more ready for investment than others, and scaling back projects has dented the confidence of some investors.
But overall, the tide is turning. The crowding out fears of 2019 have been replaced by a drive to get the private sector more involved, and while it will take time for momentum to fully develop, the process of passing the baton has already begun.
READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDFRiyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.
Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:
> RAMADAN: Data disproves the Ramadan slowdown story> INDUSTRY REPORT: Chemicals producers look to cut spending> INDUSTRY REPORT: Global petrochemical project capex set to rise until 2030> MARKET FOCUS: Egypt’s crisis mode gives way to cautious revival> LEADERSHIP: Delivering Saudi Arabia’s next phase of rail growth> INTERVIEW: Abu Dhabi’s Enersol charts acquisitions pathTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/15842555/main.gif -
Read the March 2026 MEED Business Review
3 March 2026
Download / Subscribe / 14-day trial access Saudi Arabia’s priorities have shifted over the past decade, with officials at February’s Private Sector Forum confirming a reprioritisation since 2016 that includes postponing the 2029 Asian Winter Games in Trojena and scaling back projects such as The Line in response to global economic uncertainty.
In 2026, the Public Investment Fund’s role as the main driver of development is shifting towards greater private sector involvement, a transition examined by MEED editor Colin Foreman in the latest issue of MEED Business Review.March’s market focus is on Egypt, where the country’s crisis mode is giving way to a cautious revival.
This edition also reports that the region’s downstream sector may face subdued project spending in 2026 due to flattening demand and weak margins.
In the latest issue, we disprove the Ramadan slowdown story, present exclusive leadership insight from Jacobs on delivering Saudi Arabia’s next phase of rail growth and outline some important lessons learnt from a power plant decommissioning. We also talk to senior executives at Enersol, Lamar Holding and Metito.
We hope our valued subscribers enjoy the March 2026 issue of MEED Business Review.
Must-read sections in the March 2026 issue of MEED Business Review include:
> AGENDA: Saudi Arabia’s private sector picks up the baton> RAMADAN: Data disproves the Ramadan slowdown story
INDUSTRY REPORT:
Downstream
> Chemicals producers look to cut spending
> Global petrochemical project capex set to rise until 2030> LEADERSHIP: Delivering Saudi Arabia’s next phase of rail growth
> POWER: Lessons learnt from a power plant decommissioning
> INTERVIEW: Abu Dhabi’s Enersol charts acquisitions path
> INTERVIEW: Lina Noureddin, CEO of Lamar Holding, on the evolving PPP landscape
> INTERVIEW: Contract award marks Metito’s return to municipal projects
> MARKET FOCUS EGYPT:
> COMMENT: Egypt’s crisis mode gives way to cautious revival
> GOVERNMENT: Egypt adapts its foreign policy approach
> ECONOMY & BANKING: Egypt nears return to economic stability
> OIL & GAS: Egypt’s oil and gas sector shows bright spots
> POWER & WATER: Egypt utility contracts hit $5bn decade peak
> CONSTRUCTION: Coastal destinations are a boon to Egyptian construction> MEED COMMENTS:
> Winter Games delay raises uncertainty for Saudi construction
> Duqm petrochemicals revival provides fillip to Gulf projects market
> Solar deals signal Saudi Arabia’s energy ambitions
> Hydrogen bridge awaits bankable contracts> GULF PROJECTS INDEX: Gulf index leaps upward in 2026
> JANUARY 2025 CONTRACTS: Middle East contract awards
> ECONOMIC DATA: Data drives regional projects
> OPINION: The war that (almost) no one wants
> BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts
To see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/15839736/main.gif -
Firms prepare Port of Duqm consultancy bids
3 March 2026
Oman’s Port of Duqm has issued tender notices inviting consultants to bid for two packages by mid-March.
The scope of the first tender covers the consultancy services for inspection, scope preparation and supervision of the sewage treatment plant.
The bid submission deadline is 18 March.
The scope of the other tender includes the consultancy services for port marine traffic assessment/simulation and impact study.
The bid submission deadline for this package is on 17 March.
Both tenders were floated late last month.
The Port of Duqm is a deepwater, multipurpose port on Oman’s Arabian Sea coast, developed within the Special Economic Zone at Duqm (Sezad).
Its location outside the Strait of Hormuz is a key advantage, positioning Duqm as a strategic alternative gateway for cargo moving between the Gulf, the Indian subcontinent and East Africa, and supporting Oman’s push to grow non-oil trade and port-led industry.
Designed to handle a mix of cargoes, including containers, dry bulk, breakbulk and liquid bulk, the port forms part of a wider Duqm complex that also includes a major dry dock and large industrial land allocations for energy, manufacturing and logistics projects.
As the port and SEZ expand in phases, consultancy tenders typically reflect the next steps in delivery and operations, covering engineering and technical studies, commercial assessments, and readiness planning tied to new terminals and industrial tie-ins.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15840397/main.jpg -
Diriyah awards Pendry superblock package
3 March 2026
Saudi Arabian gigaproject developer Diriyah Company has awarded an estimated SR2.5bn ($666m) contract to build the Pendry superblock package in the second phase of the Diriyah Gate development (DG2).
The contract was awarded to the local firm Saudi Constructioneers.
The Pendry superblock encompasses the construction of a hotel, known as the Pendry Hotel, along with residential and commercial assets.
The project will cover an area of 75,365 square metres (sq m) and is located in the northwestern district of the DG2 area.
Contractors had submitted final proposals for a contract in September last year, as MEED reported.
The tender was issued in June last year.
The latest contract follows the Diriyah Company’s award of a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan.
The contract was awarded to the joint venture of local firm BEC Arabia and Indian contractor Ashoka Buildcon.
The project has a gross floor area of over 31,000 sq m.
The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15778187/main.jpg -
Local firm to develop $598m Muscat tourism project
3 March 2026
Oman’s Ministry of Heritage & Tourism has signed an agreement with local firm Sorouh Al-Qurm Real Estate Company to build an integrated tourism complex in the Al-Qurm area of Muscat.
The project will be developed with a total investment estimated at RO230m ($598m).
Planned across more than 165,000 square metres (sq m), the development will include two four-star hotels offering over 400 rooms, alongside leisure components such as an indoor games hall and trampoline attractions.
The site will also incorporate commercial spaces and freehold residential units, among other amenities.
The agreement was signed by Sayyid Ibrahim Bin Said Al-Busaidi, minister of heritage and tourism, and Khaled Khudair Mashaan, chairman of Al-Argan International Real Estate Company, who signed as the authorised representative for Sorouh Al-Qurm Real Estate Company.
GlobalData forecasts that the Omani construction industry will expand at an average annual growth rate of 4.2% from 2025 to 2028.
Growth in the country will be supported by rising government investments in renewable energy and transport infrastructure, as well as in the housing sector, as part of the Oman Vision 2040 plan.
https://image.digitalinsightresearch.in/uploads/NewsArticle/15839476/main.jpg