Saudi Arabia Achieves World Record Low Electricity Cost From Wind Power
In a significant development for the renewable energy sector, the Saudi National Renewable Energy Program (NREP) has achieved a new milestone with the signing of two power purchase agreements under Round 4. These agreements, supervised by the Ministry of Energy and facilitated by the Saudi Power Procurement Company as the Principal Buyer, were signed with a consortium led by MARUBENI Corporation. The contracts pertain to the procurement of power from two major wind projects, AlGhat and Wa'ad Alshamal, boasting capacities of 600 MW and 500 MW, respectively. This announcement was made during the Saudi-Japan Vision 2030 business Forum, marking a significant step towards achieving the energy goals set by the Kingdom.
The Minister of Energy, His Royal Highness Prince Abdulaziz Bin Salman bin Abdulaziz Al Saud, expressed profound gratitude towards the leadership of Saudi Arabia, including the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, and the Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, for their unwavering support and encouragement. This support has been crucial in advancing the Ministry of Energy's objectives, particularly concerning the Vision 2030 targets for the energy sector.
Notably, the AlGhat Wind Project has set a new global benchmark by achieving a record low cost of electricity production from wind power at 1.56558 cents/kWh (5.87094 halalas/kWh), based on the Levelized Cost of Electricity (LCOE). Similarly, the Wa'ad Alshamal Wind Project has also set a record with its low LCOE of 1.70187 cents/kWh (6.38201 halalas/kWh). These achievements underscore the potential for wind energy to be an economically viable and significant contributor to the country's energy mix.
Together, these projects are expected to generate enough electricity to power approximately 257,000 residential units annually. This capacity will play a crucial role in enhancing energy efficiency across Saudi Arabia, demonstrating the impactful role of renewable energy projects in the nation's energy landscape.
Prince Abdulaziz highlighted the strategic importance of these projects within the broader scope of the NREP's objectives. The program aims to maximize the use of renewable energy resources, reduce dependence on liquid fuels for power generation, and achieve a balanced energy mix. By 2030, the goal is to have renewables account for around 50% of Saudi Arabia's energy portfolio, in line with the ambitious targets set by Vision 2030. These developments not only signify progress in the renewable energy sector but also represent a shift towards sustainable and efficient energy solutions in the Kingdom.
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