In a significant move towards a sustainable future, the Saudi Principal Buyer has inked power purchase agreements worth SAR31 billion ($8.3 billion) with a consortium led by ACWA Power, a major utility player in the region. This ambitious initiative aligns with Saudi Arabia’s National Renewable Energy Program, overseen by the Ministry of Energy, and aims to achieve a remarkable total capacity of 15,000 megawatts (MW) upon completion.
The consortium, prominently featuring ACWA Power, is further supported by Badeel, a subsidiary of the Public Investment Fund (PIF), and Aramco Power, a division of the global oil titan Saudi Aramco. This coalition underscores Saudi Arabia’s commitment to diversifying its energy portfolio and reducing its carbon footprint.
The official signing ceremony witnessed the presence of the esteemed Minister of Energy and Board of Directors of the Principal Buyer, Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, highlighting the strategic importance of this project.
Among the seven groundbreaking projects, five are photovoltaic (PV) solar projects set to illuminate various regions of Saudi Arabia:
– Bisha Project in Aseer Region: With a capacity of 3,000MW and an LCOE of 4.83708 halalas/kWh (1.28989 US cents).
– Humaij Project in Madinah Region: Also boasting a 3,000MW capacity, with an LCOE of 4.90682 halalas/kWh (1.30848 US cents).
– Khulis Project in Makkah Region: Offering a capacity of 2,000MW and an LCOE of 5.10439 halalas/kWh (1.36117 US cents).
– Afif 1 and Afif 2 Projects in Riyadh Region: Each with a capacity of 2,000MW, offering competitive LCOEs of 4.74736 (1.26596 US cents) and 4.72346 halalas/kWh (1.25959 US cents) respectively.
The two wind energy projects add to this robust initiative:
– Starah Project in Riyadh Region: With a capacity of 2,000MW and an LCOE of 7.71422 halalas/kWh (2.05712 US cents).
– Shaqra Project in Riyadh Region: Offering 1,000MW capacity and an LCOE of 6.99750 halalas/kWh (1.86600 US cents).
These agreements collectively represent the largest capacity signed for renewable energy projects globally in a single phase. They further cement Saudi Arabia’s leadership in the renewable energy sector, achieving competitive electricity production costs due to efficient financing, advanced development models, and bolstered investor confidence.
The Saudi Principal Buyer plays a pivotal role in these projects, conducting feasibility studies, tendering electricity generation projects, and formalizing power purchase agreements. To date, the company has launched renewable electricity generation projects with a total capacity of 43,213 MW, with 38,713 MW under signed agreements and 10,213 MW already connected to the grid.
By the end of this year, the grid connection capacity is expected to reach 12,713 MW, with an ambitious target of 20,013 MW by the end of 2026. This milestone not only highlights Saudi Arabia’s commitment to renewable energy but also its strategic foresight in leading the global transition towards a sustainable energy future.
