Masdar in Race to Develop Saudi Solar Projects
- Business Companies Regional solar power
Global Business Magazine- 4 minutes read
Masdar, the Abu Dhabi Future Energy Company, is in the race to develop three of the four solar power projects, that were announced by the Saudi Power Procurement Company (SPPC) in February this year. The estimate cost of the four projects are around $2.13 billion,
SPPC announced the shortlisted bidders for the fifth round of solar projects under the National Renewable Energy Program (NREP), which aims to increase the renewable share in the Kingdom’s power energy mix to 50% by 2030.
The Saudi company launched the Request for Proposals (RFP) for the Round 5 solar projects with combined capacity 3700 MW in February this year. They include Al-Sadawi Solar PV IPP Project (2 GW), Al-Masa’a Solar PV IPP Project (1 GW), Al-Henakiyah2 Solar PV IPP Project (400 MW) and Rabigh2 Solar PV IPP Project (300 MW).
The Saudi company said that it has received six bids for each project in August this year and they were evaluated to ensure compliance with the RFP’s technical and commercial requirements. Apart from Masdar, South Korean company SPIC Huanghe Hydropower Development Co., Ltd., has also been shortlisted by SPPC.
According to the Saudi company, Masdar and SPIC Huanghe are part of the consortium for the Al-Sadawi project. For the Al Henakiyah2 Project and Rabigh2 project, Masdar has teamed up with the Korea Electric Power Corporation and Saudi conglomerate Nesma Company.
BOO Model
The selected firms will execute the projects under a build, own, and operate (BOO) model, allowing them to retain 100% ownership, with each project involving a 25-year power purchase agreement with SPPC.
Besides Masdar and its partners, SPPC has also named other qualified bidders such as Al Jomaih Water and Electricity Co., AlFanar Co., B Grimm Power Public Company Limited, Itochu Corporation, JERA Co., Jinko Power, Kahrabel FZE, Marubeni Corporation, Nebras Power, Power Construction Corporation of China, Samsung C&T Corporation, Saudi Electricity Company, Sumitomo Corporation and Total Energies.
Solar power is currently the leading renewable energy source in Saudi Arabia and is expected to further expand its dominance in the electricity mix under the Net Zero 2060 plan. As of June 2024, around 11 GW of solar photovoltaic capacity was under construction across Saudi Arabia.
Data from the UAE-based International Renewable Energy Agency (IRENA) showed that Saudi Arabia’s renewable energy capacity reached 2,689 MW, a significant increase from 843 MW in 2022, and this growth was largely driven by solar energy, which surged to 2,285 MW from just 440 MW the previous year.
Wind energy also contributed to this expansion, reaching 403 MW by the end of 2023. Despite these advances, renewable energy still accounted for only 2.9% of the Kingdom’s total electricity capacity which is heavily dependent on natural gas and oil, with the share of oil gradually falling.
