Saudi Power Procurement Company Signs Power Purchase Agreements For Five Projects Totaling 9200 MW

Saudi Power Procurement Company, under the leadership of Prince Abdulaziz bin Salman bin Abdulaziz, has entered into Power Purchase Agreements (PPAs) for five Independent Power Producer (IPP) projects. These projects will generate a total of 9,200 MW. The Energy Ministry announced that these initiatives include Rumah and Nairyah Thermal Energy projects, which will use Combined Cycle Gas Turbine technology with natural gas as the primary fuel.

The Rumah and Nairyah Thermal Energy Projects are designed to incorporate carbon capture units and have a combined capacity of 7,200 MW. The PPAs for Rumah 1 and Nairyah 1, each with a capacity of 1,800 MW, were signed with a consortium comprising ACWA Power, Saudi Electricity Company (SEC), and Korea Electric Power Corporation (KEPCO). The Levelized Costs of Electricity (LCOEs) for these projects are set at 4.5859 Cents/kWh for Rumah 1 and 4.6114 Cents/kWh for Nairyah 1.

In addition to thermal energy projects, the Al Sadawi Solar Photovoltaic Project is part of the National Renewable Energy Program's fifth round. This solar project will contribute an additional 2,000 MW to the national grid. A consortium including Abu Dhabi Future Energy Company PJSC (Masdar), KEPCO, and GD Power Development Co. signed the PPA for this project. It is expected to begin commercial operations in the second quarter of 2027.

The Al Sadawi Solar PV Project aims to deliver clean energy at an LCOE of just 1.2926 Cents/kWh. This competitive rate underscores Saudi Arabia's commitment to renewable energy as part of its Vision 2030 goals. By focusing on both gas and renewable sources, the Kingdom plans to achieve an optimal energy mix by 2030 while reducing reliance on liquid fuels.

The combined investment in these power generation projects is estimated at around 35 billion Saudi Riyals or approximately 9.3 billion USD. These investments reflect Saudi Arabia's strategic focus on expanding its energy sector capabilities in line with Vision 2030 objectives.

By the close of 2024, Saudi Arabia aims to have agreements in place for 25 renewable energy projects across various regions. These initiatives are projected to collectively produce about 23 gigawatts of electricity, significantly contributing to the nation's energy transition efforts.

The PPAs for Rumah 2 and Nairyah 2 IPPs also involve a capacity of 1,800 MW each. These agreements were finalized with a consortium that includes Abu Dhabi National Energy Company PJSC (TAQA), JERA, and Al-Bawani local company. The LCOEs for these projects are slightly lower at 4.5613 Cents/kWh for Rumah 2 and 4.4960 Cents/kWh for Nairyah 2.

Both Rumah and Nairyah Thermal Energy Projects are slated to commence commercial operations by the second quarter of 2028. These developments highlight Saudi Arabia's ongoing efforts to diversify its energy sources while enhancing efficiency through advanced technologies.

With inputs from SPA