Principal Buyer Finalises Power Purchase Agreements For Seven Renewable Energy Projects Totaling 15,000 MW

Saudi Arabia has signed agreements for seven new solar and wind energy projects, totalling 15,000 MW. These projects are part of the National Renewable Energy Program, overseen by the Ministry of Energy. The agreements, worth SAR31 billion (around $8.3 billion), were signed in the presence of Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Minister of Energy.

The consortium leading these projects includes ACWA Power as the main developer, in collaboration with the Water and Electricity Holding Company (Badeel) and Aramco Power. Badeel is owned by the Public Investment Fund, while Aramco Power is a subsidiary of Saudi Aramco.

The photovoltaic solar projects include several key initiatives. The Bisha Project in Aseer Region has a capacity of 3,000 MW with an LCOE of 4.83708 halalas/kWh (1.28989 US cents). In Madinah Region, the Humaij Project also boasts a 3,000 MW capacity with an LCOE of 4.90682 halalas/kWh (1.30848 US cents).

In Makkah Region, the Khulis Project offers a capacity of 2,000 MW and an LCOE of 5.10439 halalas/kWh (1.36117 US cents). Riyadh Region hosts two projects: Afif 1 and Afif 2, each with a capacity of 2,000 MW and LCOEs of 4.74736 halalas/kWh (1.26596 US cents) and 4.72346 halalas/kWh (1.25959 US cents), respectively.

The wind energy sector features two significant projects in Riyadh Region. The Starah Project has a capacity of 2,000 MW with an LCOE of 7.71422 halalas/kWh (2.05712 US cents). Meanwhile, the Shaqra Project provides a capacity of 1,000 MW at an LCOE of 6.99750 halalas/kWh (1.86600 US cents).

This signing marks the largest global renewable energy project capacity agreed upon in a single phase to date. It underscores Saudi Arabia's leadership in renewable energy infrastructure development and its ability to achieve competitive electricity production costs per kilowatt-hour.

Principal Buyer's Role

The Principal Buyer plays a crucial role in this initiative by preparing feasibility studies and tendering electricity generation projects. It also signs power purchase agreements with developer consortia to ensure project success.

To date, renewable electricity generation projects launched by this entity have reached a total capacity of 43,213 MW. Of these, power purchase agreements cover projects totalling 38,713 MW.

Future Capacity Goals

Currently, about 10,213 MW have been connected to the grid from these initiatives. By the end of 2025, this figure is expected to rise to 12,713 MW and further increase to 20,013 MW by the end of 2026.

This ambitious plan reflects growing investor confidence in Saudi Arabia's investment environment due to efficient financing models and development strategies.

With inputs from SPA