Saudi Arabia has taken a historic step on the path to energy transition. The Saudi Power Purchasing Company (SPPC) recently signed power purchase agreements with a consortium led by ACWA Power for seven solar and wind power projects, with a total installed capacity of 15GW (15,000 megawatts) and a total investment of up to 31 billion Saudi riyals (about US$8.3 billion). This single-phase development scale not only set a record in Saudi Arabia, but also became the largest centralized contracting case in the global renewable energy field.

Project Highlights

The signed projects include 5 photovoltaic power plants and 2 wind farms, spanning Saudi Arabia's four core economic zones. Among them, Riyadh's Afif No. 2 photovoltaic project set a new low for Saudi Arabia's photovoltaic project with a kWh cost of 1.25959 cents/kWh, which is more than 80% lower than the cost of traditional coal power. Among wind power projects, the cost of electricity per kilowatt-hour of the Shegla wind power project is only 1.86600 cents/kWh, demonstrating Saudi Arabia's strong cost control capabilities in the field of renewable energy.

Strategic significance

This series of projects is jointly developed by Saudi Arabia's local energy giant ACWA Power, Badeel Hydropower Company of the Saudi Public Investment Fund (PIF) and Saudi Aramco Energy, marking the determination of Saudi traditional energy companies to transition to clean energy. After the completion of the project, it will help Saudi Arabia achieve the goal of "50% electricity from renewable energy by 2030", while reducing 40% of the country's dependence on crude oil power generation and releasing more oil export capacity.

Global impact

"This is not only an important milestone in Saudi Arabia's energy transition, but will also reshape the global renewable energy market pattern." An IEA analyst commented, "Saudi Arabia has reduced the cost of renewable energy to unprecedented levels through large-scale centralized development, which will force global energy companies to accelerate innovation." "

It is worth noting that although the project is led by local Saudi enterprises, the Chinese industrial chain has been deeply involved. Photovoltaic module suppliers such as LONGi and Jinko are expected to be shortlisted, Power China, Energy Construction and other enterprises may participate in EPC service subcontracting, and energy storage companies such as CATL and BYD are also negotiating cooperation with Saudi Arabia.

With the advancement of this batch of projects, Saudi Arabia is transforming from an "oil overlord" to a "renewable energy leader". Industry experts predict that by 2030, the Middle East will account for 25% of the world's installed photovoltaic capacity, and China's industrial chain is expected to play a key role in this process.

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