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.
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The ministry’s focus on measurable outcomes is reflected in the Emirates Road enhancement project, which involves widening approximately 25 kilometres of Emirates Road from three to five lanes in each direction, alongside major improvements to Interchange No. 7.
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For Al-Mansoori, resilience, domestic capability and effective delivery are closely connected. Stronger local supply chains can reduce exposure to external shocks, while closer engagement with contractors can help projects withstand cost pressures.
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Riyadh tenders Expo 2030 Adaptation and Innovation Pavilion21 October 2026

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Mubadala Bio lands Lilly logistics deal21 October 2026
Mubadala Bio, the life sciences subsidiary of Abu Dhabi state investor Mubadala Investment Company, has signed an agreement with US drugmaker Eli Lilly to localise the packaging and logistics of Lilly’s glucagon-like peptide-1 (GLP-1) medicines in Abu Dhabi.
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The Emirates Drug Establishment approved Lilly’s oral GLP-1 drug Foundayo (orforglipron) for chronic weight management in April. The companies said this made the UAE the second country in the world to register the medicine.
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Chinese/local joint venture wins Qiddiya stadium facade21 October 2026
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A joint venture of China’s Fangda Group and Saudi Arabia’s IKK Group has secured a SR1.15bn ($306m) contract to deliver curtain wall facade works for the Prince Mohammed Bin Salman Stadium in Qiddiya City, Riyadh.
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