RIYADH: Saudi Arabia is set to add 5,500 megawatts of solar energy following the signing of three deals by its principal buyer, advancing its strategy to enhance renewable sources.
The Saudi Power Procurement Co. finalized power purchase agreements worth SR12.3 billion ($3.3 billion) for three new solar photovoltaic projects with ACWA Power Co., Water & Electricity Holding Co., also known as Badeel, a wholly-owned subsidiary of the Public Investment Fund, and Aramco Power.
This comes as Saudi Arabia’s National Renewable Energy Program aims to achieve the Kingdom’s target energy mix of 50 percent renewables by the end of this decade, supporting efforts to reduce liquid fuel consumption and aligning with Saudi Vision 2030 objectives for the energy sector.
The PPAs, signed by Saudi Minister of Energy Prince Abdulaziz bin Salman Al-Saud, are integral to the NREP supervised by the ministry. The contract duration for each PPA is 25 years.
The solar projects include Haden Solar PV and Al-Muwaih Solar PV, both located in the Makkah region, each with a capacity of 2,000 MW. The third project, Al-Khushaybi PV in Qassim Province, has a total capacity of 1,500 MW.
Saudi Arabia plans to begin awarding contracts for new renewable energy projects in 2024, aiming for a maximum capacity of 20 gigawatts. By 2030, the goal is to achieve a capacity between 100 and 130 gigawatts, contingent on the growth of electricity demand, the ministry said.
The financial impact of the contracted revenues is expected to be reflected after the Commercial Operation Dates expected by the first half of 2027.
Since the inception of the renewables program, a total of 21 projects have been awarded, amounting to 19 GW in capacity.
Currently, seven projects totaling 4.1 GW are operational and connected to the grid, while eight projects with a total capacity of 8.2 GW are under construction. Additionally, six projects totaling 7 GW are in the final stages of financial closure.
Furthermore, six additional renewable energy projects with a combined capacity of 6.7 GW have been put out to bid since the beginning of 2024.
Further capacities are planned to be tendered before year-end to achieve the target of tendering 20 GW annually.
In May, SPPC signed two PPAs with a consortium led by Japan’s Marubeni Corp. in Tokyo. These agreements were part of the fourth phase of Saudi Arabia’s NREP, overseen by the Ministry of Energy.
The agreements pertain to the Al-Ghat wind power project, with a capacity of 600 MW, and the Waad Al-Shamal wind power project, with a capacity of 500 MW. These agreements were signed during the Saudi-Japan Vision 2030 Business Forum held in Japan.
