Saudi Arabia's Principal Buyer Awards Five Renewable Energy Projects With Record Low Costs

Saudi Arabia has announced new projects in renewable energy, including a wind energy project and four solar energy projects. These initiatives are part of the sixth phase of the National Renewable Energy Program, overseen by the Ministry of Energy. The total capacity of these projects is 4,500 megawatts, with investments exceeding 9 billion Saudi riyals (approximately US$2.4 billion).

The Dawadmi Wind Energy Project, located in Riyadh Province, has set a new world record for the lowest cost of electricity generation from wind power. This project, with a capacity of 1,500 MW, is being developed by a consortium that includes Korea Electric Power Corporation (KEPCO), Nesma Renewable Energy Company Ltd., and Etihad Water and Electricity Company PJSC (EtihadWE). The Levelized Cost of Electricity (LCOE) for this project is 1.33803 cents per kWh (5.01760 Halala/kWh).

The Najran Solar Energy Project is another significant development. Located in the Najran region, it is being developed in partnership with Abu Dhabi Future Energy Company (Masdar). With a capacity of 1,400 MW and an LCOE of 4.11307 halalas per kWh (1.09682 US cents per kWh), it represents the second-lowest cost globally for solar energy generation.

In Jazan Province, two solar PV IPP plants have been awarded. The Ad Darb Solar PV IPP Plant has a capacity of 600 MW and an LCOE of 1.36070 cents per kWh (5.10262 Halala/kWh). This project was awarded to Abu Dhabi Future Energy Company PJSC – Masdar.

The Samtah Solar PV IPP Plant also has a capacity of 600 MW and was awarded to a consortium comprising Saudi Electricity Company (SEC) and EDF POWER SOLUTIONS INTERNATIONAL SAS. It has an LCOE of 1.48678 cents per kWh (5.57544 Halala/kWh).

Additionally, the As Sufun Solar PV IPP Plant in Hail Province has been awarded to Al Jomaih Energy & Water Company (AEW) holding and TotalEnergies Renewables SAS. This plant has a capacity of 400 MW with an LCOE of 1.50686 cents per kWh (5.65074 Halala/kWh).

Saudi Arabia's Renewable Energy Leadership

These projects highlight Saudi Arabia's leadership in renewable energy development, achieving some of the lowest global costs for electricity generation. This success is due to efficient financing models and growing investor confidence in the Kingdom's investment environment.

The Principal Buyer plays a crucial role by conducting predevelopment studies, tendering power generation projects, and signing Power Purchase Agreements with developers.

By the end of 2025, Saudi Arabia aims to tender a total renewable energy generation capacity reaching 64 GW. Currently, with round six projects signed, the total signed renewable capacity stands at 43.2 GW, with 12.3 GW already connected to the grid.

With inputs from SPA