Saudi Arabia Powers Ahead with $8.3 Billion Renewable Energy Milestone

In a landmark move for global renewable energy, a Saudi consortium led by ACWA Power has signed agreements worth SR31 billion ($8.3 billion) to develop seven major solar and wind energy projects, boasting a combined capacity of 15,000 megawatts.

This historic deal, announced by the Saudi Press Agency, represents the largest single-phase capacity signed globally for renewable energy projects, reinforcing Saudi Arabia’s leadership in sustainable energy development.

A Bold Step in the National Renewable Energy Program

The agreements, signed under the supervision of the Ministry of Energy and in the presence of Energy Minister Prince Abdulaziz bin Salman, fall under the National Renewable Energy Program (NREP). The consortium comprises ACWA Power, the Water and Electricity Holding Company (Badeel)—a subsidiary of the Public Investment Fund—and Aramco Power, owned by Saudi Aramco. This collaboration underscores the Kingdom’s strategic vision to diversify its energy mix and achieve 50% renewable energy by 2030.

The agreements reflect Saudi Arabia’s commitment to expanding its renewable energy infrastructure and delivering electricity at globally competitive costs. This milestone showcases the strong investor confidence and the success of Saudi Arabia’s financing and development strategies in the energy sector.

Key Projects Driving the Energy Transition

• Photovoltaic Solar Initiatives: Five solar projects form the backbone of this initiative, including the 3,000 MW Bisha Project in Asir and the 3,000 MW Humaij Project in Madinah. The 2,000 MW Khulis Project in Makkah, along with the Afif 1 and Afif 2 projects in Riyadh (each 2,000 MW), will collectively contribute 12,000 MW of solar capacity.

• Wind Energy Developments: Two wind projects in Riyadh—the 2,000 MW Starah Project and the 1,000 MW Shaqra Project—will add 3,000 MW of wind power to the Kingdom’s renewable portfolio.

• Global Significance: The 15,000 MW combined capacity marks the largest single-phase renewable energy agreement worldwide, setting a new benchmark for scale and ambition in the sector.

Competitive Costs and Investor Confidence

The projects are designed to deliver electricity at highly competitive levelized costs of energy (LCOE), with figures ranging from 4.72346 halalas/kWh (1.25959 US cents) for Afif 2 to 7.71422 halalas/kWh for the Starah Project. This cost efficiency, coupled with robust financing models, highlights Saudi Arabia’s ability to attract strong investor confidence. The involvement of major players like the Public Investment Fund and Saudi Aramco further solidifies the Kingdom’s position as a global hub for renewable energy investment.

Industry Impact and Strategic Vision

The agreements align with Saudi Arabia’s Vision 2030, which aims to diversify the economy and reduce reliance on fossil fuels. By expanding its renewable energy infrastructure, the Kingdom is not only advancing its net-zero emissions goal by 2060 but also setting a precedent for large-scale renewable projects globally. The Saudi Power Procurement Company (SPPC), responsible for tendering and signing these agreements, has already launched projects totaling 43,213 MW, with 38,713 MW under signed agreements and 10,213 MW connected to the grid.

These projects will significantly boost local employment and supply chains, with ACWA Power emphasizing local content in procurement and development. The anticipated grid connection of 12,713 MW by the end of 2025 and 20,013 MW by 2026 further underscores the Kingdom’s rapid progress toward its renewable energy targets.

A New Era for Sustainable Energy

The $8.3 billion investment in these seven projects marks a pivotal moment in Saudi Arabia’s energy transition. By leveraging cutting-edge solar and wind technologies, ACWA Power and its partners are paving the way for a sustainable future, delivering clean energy to millions of households while reinforcing the Kingdom’s role as a global leader in renewable energy innovation.

Source: https://www.arabnews.com/node/2607947/business-economy 

Prepared by: Next Move Strategy Consulting