Saudi Arabia’s Energy Ministry has signed the power-purchase agreements (PPAs) with the developer teams that won contracts to develop two solar photovoltaic (PV) independent power projects in the Kingdom.

The contract to develop the 700MW Al-Rass solar PV IPP has been awarded to a consortium that comprises Acwa Power, Huanghe Hydropower Development Company (SPIC) and Water & Electricity Holding Company.

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The team offered a levelised electricity cost of hals5.62342 a kilowatt-hour (kWh) ($cents 1.5/kWh) for the contract.

Total project investment is estimated at SAR1.7bn ($453m).

A second consortium that contains Jinko Power Middle East and Jinko Power Dhafra Holding won the contract for the 300MW Saad solar IPP, The team offered hals5.56255/kWh for the contract, which is estimated to require SAR800m in investment.

The schemes are part of the third round of the Energy Ministry’s National Renewable Energy Programme (NREP). 

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Negotiations are understood to be underway for the remaining two schemes under NREP’s third round.

The projects, shortlisted bidders and their respective LCOE offers are:

120MW Wadi al-Dawassir solar PV IPP

  • Total Solar: hals7.00059/kWh
  • Acwa Power, Huanghe Hydropower Development Company (SPIC) and Water & Electricity Holding Company: hals9.83722/kWh

80MW Layla solar PV IPP

  • Acwa Power, Huanghe Hydropower Development Company (SPIC) and Water & Electricity Holding Company: hals11.18905/kWh
  • Alfanar, Asma Capital: hals12.18726/kWh

The Kingdom’s Energy Ministry received proposals for the projects in May and June 2021.

The Energy Ministry is overseeing the procurement of 30%t of the Kingdom’s target to build 27.3GW of renewable energy capacity by 2024 and 58.7GW by 2030, or roughly half of its electricity production mix by the end of the decade. 

Sovereign wealth entity the Public Investment Fund (PIF) will deliver the remaining 70% of Riyadh’s target renewable energy capacity.

Last April, the ministry and PIF signed project agreements for seven renewable energy contracts with a total combined capacity of close to 3GW.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.