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Yanbu wind award expected in 2024

16 July 2024

 

The contract to develop and operate the 700MW Yanbu wind farm in Saudi Arabia is on track to be awarded by the end of 2024. 

According to a source close to the project, the contract is expected to be awarded before the end of the year.

MEED understands a final clearance is being obtained before the contract can be awarded to the selected bidder, following the completion of the bid evaluation process.

The Yanbu wind independent power project (IPP) was one of three tendered under the fourth public tendering round of Saudi Arabia's National Renewable Energy Programme (NREP).

The contracts to develop the first two schemes, the 600MW Al-Ghat and the 500MW Waad Al-Shamal wind IPPs, were awarded in May to a team of Japan's Marubeni Corporation and the local Ajlan & Bros.

In addition to the Marubeni-led team, industry sources previously told MEED that the favourites to win the contracts were the teams separately led by Riyadh-based Acwa Power and France's Engie.

"That information is still confidential," the source said when asked which team had emerged on top during the bid evaluation process for the Yanbu wind IPP.

This development came after industry sources suggested that land issues could be a key factor holding back the award of the Yanbu wind IPP contract.

MEED reported in May that market expectations and speculation had intensified regarding the award of the Yanbu wind contract, as well as the winning bidder's proposed tariff.

At the time, some industry sources alluded to land issues as a key factor holding back the award of the contract.

An industry source also points out that Yanbu has lower wind potential and wind speed, resulting in a lower capacity factor compared to the other two locations. "It is interesting to see whether it results in a lower tariff offer," the source said.

World record-low tariffs

The Marubeni-led consortium has agreed to develop and operate the 600MW Al-Ghat wind IPP project with a new world-record-low levelised electricity cost (LCOE) from wind power of $cents 1.56558 a kilowatt-hour (kWh), or about 5.87094 halalas/kWh.

The 500MW Waad Al-Shamal project has also achieved a second world-record-low tariff for wind power of $cents 1.70187/kWh or 6.38201 halalas/kWh, the energy ministry announced.

The tariff achieved for Al-Ghat is almost 22% lower compared to the LCOE agreed for Saudi Arabia's first wind IPP, the 400MW Dumat Al-Jandal scheme, which was awarded in 2019.

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Jennifer Aguinaldo

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