Saudi Power Procurement Co Awards Four IPPs Valued at $3.63 Billion

A consortium comprising Saudi Electricity Co (SEC) and ACWA Power Co announced that they have received a notice on October 24 from Saudi Power Procurement Co (SPPC), awarding them the development of two Independent Power Plants (IPPs) – Taiba 1 and Qassim 1.

These two projects have a capacity of 3.6 GW each and they will be using combined-cycle gas turbine technology, the companies said in separate statements to Saudi stock exchange Tadawul on Wednesday.

The SPPC also announced the winning bidders for its two more key conventional independent power plant (IPP) projects – Taiba-2 and Qassim-2 – with a capacity of 1.8 GW each to a consortium comprising the Saudi-based Al Jomiah Energy and Water and French utility major EDF and Buhur.

The total value of these four projects is estimated to reach $3.63 billion.

Further updates will be announced in the coming days, SEC said and noted that the related financial impact cannot be determined at present. The deal does not include any related parties.

SPPC is a wholly state-owned limited liability Co. and the principal buyer of both projects, SEC said adding that the consortium is seeking to cooperate with SPPC and the other relevant parties to conclude 25-year energy procurement deals in November 2023.

These facilities will boast carbon capture and sequestration (CCS) readiness mechanisms in alignment with the Saudi Green Initiative, and the greenhouse gases (GHGs) net-zero goals by 2060, which will be achieved through the deployment of technologies for circular carbon economy approach.

Part of Energy Mix Plans

These projects are being implemented as part of the Kingdom’s energy mix plan under the supervision of the Saudi Arabia’s Ministry of Energy, said SPPC, a limited liability company owned by the government, which is the off taker for both projects.

Mainly aimed at meeting the future load demand of the electrical system, the energy mix plan will also ensure the reliability and of energy supply, localisation of the gas turbines industry as well as permit the utilisation of carbon capture technologies.

Early this year in January, SPPC had launched the request for proposals (RFP) for these projects, and by July-end, it had received five bids for each of the Taiba-2 and Qassim-2 projects. The following month, five bids were received for each of the Taiba-1 and Qassim-1 projects.

All bids were evaluated to ensure compliance with the RFP’s technical and commercial requirements before the announcement of the winning bidders, SPCC said. Each project will be developed on a build, own, and operate (BOO) basis by the wining consortiums, which will be 100% owned by the successful bidder.

The winning consortiums will now work with SPPC, its partners and relevant stakeholders to steer the project towards the signing of 25-year power purchase agreements (PPAs) next month.

According to SPPC, the projects will contain the latest Class H/J Gas Turbines of the highest efficiency in Combined Cycle operation, for the first time in the Kingdom of Saudi Arabia and will allow for the utilisation of carbon capture technologies. These projects will supply power to approximately 3 million residential units annually, it added.