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Saudi Electricity Company in talks for five power plants

10 July 2024

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Bilateral discussions to develop combined-cycle gas turbine (CCGT) electricity generation plants in Saudi Arabia are under way between Riyadh-headquartered utility Saudi Electricity Company (SEC) and the kingdom's principal buyer, Saudi Power Procurement Company (SPPC).

According to an industry source, the discussions revolve around five potential CCGT power generation plants, each with a capacity of between 1,500MW and 2,000MW.

"I believe the capacity is required urgently and that SEC is also holding parallel discussions with gas turbine original equipment manufacturers (OEMs) for these planned power generation plants," the source said.

This development aligns with SEC's plan to develop approximately 30,000MW of gas-fired capacity within and outside Saudi Arabia, which MEED reported on 13 June.

In 2022, SEC completed divesting its full interest in SPPC, which has enabled it to bid for contracts to develop and operate power generation plants, in addition to operating the kingdom's power transmission and distribution network.

Related read: Developers regroup for Saudi renewables plans

According to industry sources, SEC has booked in advance some 30GW of gas turbine capacity with the industry's leading original OEMs in anticipation of domestic and overseas demand for gas-fired generation power plants.

One of the sources said at the time that potential projects in Saudi Arabia would be developed through a bilateral agreement with SPPC and potentially in partnership with Saudi utility developer Acwa Power. 

MEED understands SEC and SPPC have appointed a financial adviser to support the development of these future projects.

A team comprising SEC and Acwa Power bid and won the contracts to develop and operate the Qassim 1 and Taiba 1 independent power projects (IPPs) last year. Each plant has a capacity of 1,800MW. The two projects are valued at SR14.6bn ($3.9bn).

A team that includes SEC is also expected to bid for the contracts to develop the Remah 1 and 2 and Nairiyah 1 and 2 gas-fired IPPs being tendered by SPPC.

New IPPs

MEED reported in June that SPPC has invited companies to bid for the transaction advisory contracts for its next gas-fired IPPs.

The Saudi principal buyer is understood to have received bids for the financial, legal and technical consultancy roles for the Al-Rais and Riyadh 16 IPPs.

The Al-Rais IPP will have a capacity of 2,400MW while the Riyadh 16 IPP has a planned capacity of 3,600MW.

In addition to these projects, the tendering process is under way for the Remah 1 and 2 and Nairiyah 1 and 2 CCGT IPPs, with a bid deadline set for the end of July.

The urgent capacity building for gas-fired power plants aligns with the kingdom's liquid displacement programme, considering that liquid fuel or oil-fired plants still account for a substantial portion of its existing fleet.

It also supports the need to build baseload capacity in anticipation of renewable energy accounting for 50% of the kingdom's electricity production mix by 2030, the expected economic and industrial boom arising from the implementation of its Vision 2030, and a broad plan to participate in regional clean energy trade.

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Jennifer Aguinaldo

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