Driven by both the global energy transition and the national strategy of "Vision 2030", Saudi Arabia is reshaping its power landscape with unprecedented intensity. In 2025, this oil kingdom launched its largest ever power grid modernization project and is advancing renewable energy projects at an unprecedented pace, marking a firm move from relying on traditional fossil fuels to a diversified, intelligent, and clean future for its energy system.

58.7 billion US dollars invested in the power grid, building the foundation for the next decade

In response to the continuous growth of urbanization and industrial electricity demand, Saudi Electricity Company (SEC) has launched a comprehensive transmission and distribution network upgrade plan in 2025. Its core is to invest a huge amount of up to 58.7 billion US dollars (220 billion riyals) between 2025 and 2030, of which 36 billion US dollars will be used for transmission backbone networks and 22.7 billion US dollars will be used for modernization of distribution systems.

This grand infrastructure plan will be implemented as follows: building and upgrading 130 high-voltage substations, adding 135000 megavolt ampere (MVA) substation capacity, and constructing a total of approximately 14000 kilometers of transmission lines (including 12900 kilometers of overhead lines and 1100 kilometers of underground cables). This will greatly enhance the power supply reliability and grid resilience of major cities and economic zones across the country.

Adequate project reserves inject sustained vitality into the market. As of September 2025, the Saudi power industry has signed a total of $15.9 billion in projects, with $10.4 billion in projects in the bidding stage and up to $162 billion in projects currently being tendered. Although the total volume has slightly declined from the peak of the previous two years, the project structure has become more reasonable, and the upgrading of the power grid and the integration of new energy have become two parallel main lines, demonstrating a more sustainable market development trend.

Renewable energy explosion, $8.3 billion power purchase agreement leading to large-scale construction

Under the strong promotion of the National Renewable Energy Program (NREP), Saudi Arabia's solar and wind energy development has entered a stage of large-scale explosion.

In June 2025, a milestone power purchase agreement worth $8.3 billion was officially implemented. The agreement, jointly signed by ACWA Power, Badeel under the Public Investment Fund (PIF), and SAPCO, will add 15000 megawatts of renewable energy capacity, including 12000 megawatts of solar energy and 3000 megawatts of wind power.

At the same time, PIF is actively promoting the second phase expansion of five existing solar power plants, with a total installed capacity of up to 9000 megawatts. The relevant concession negotiations are expected to commence before the end of 2025 and may adopt a direct award model, demonstrating the government's high attention and efficient execution of strategic renewable energy projects.

This thriving market has also attracted active participation from global giants. The Yanbu 700 MW wind power project led by Marubeni Corporation in Japan has awarded its EPC contract to Shandong Electric Power Construction Third Engineering Company (SEPCOIII) in China, with a total investment of approximately 1 billion US dollars. In addition, KEPCO, together with SEC and ACWA Power, has completed the financing and delivery of two gas-fired power plants with a total installed capacity of 3600 megawatts, with a total investment of approximately 4 billion US dollars, indicating that international capital maintains strong confidence in Saudi Arabia's medium and long-term energy market.

Reshaping investment pattern, energy storage and strategic division of labor emerge

In 2025, the investment pattern of Saudi Arabia's power industry will undergo a profound structural transformation: new energy investment has become absolutely dominant, and at the same time, clear strategic division of labor and emerging energy storage industries are jointly outlining the outline of the future power system.

In the contracts awarded this year, solar projects account for 6.6 billion US dollars and wind power accounts for 3.9 billion US dollars, accounting for more than 60% of the total investment. In sharp contrast, oil and gas power generation projects have only received $595 million in contracts, and the shift in investment focus towards clean energy has become a foregone conclusion.

In terms of investment entities, the roles of PIF and SEC are becoming increasingly clear, forming a dual wheel drive pattern of "PIF leading investment and SEC focusing on operation". PIF has won $8.3 billion in investment contracts in 2025, far exceeding the $3.2 billion in 2024 and becoming the largest investor; The SEC, on the other hand, focuses more on grid operations and the layout of critical infrastructure.

Energy storage, as a key technology supporting the high proportion of new energy access, is accelerating its layout. The total scale of battery energy storage facilities led by the SEC is 2500 megawatts (approximately 10000 megawatt hours). Among them, the two projects in Dawadami and Riyadh, each with a capacity of 500 MW/2000 MWh, have an investment of approximately 600 million US dollars. Local enterprise Alfanar has also successfully obtained five energy storage project contracts, marking an important step for Saudi Arabia in localizing the energy storage industry chain. Keywords: Saudi Arabia, overseas engineering, international engineering construction

From the $58.7 billion blueprint for modernizing the power grid to the concentrated implementation of $8.3 billion in renewable energy projects, Saudi Arabia is laying a solid energy foundation for its future economic and social development through systematic and massive investments. This is not only an upgrade of infrastructure, but also a profound energy revolution that is gradually turning the green and sustainable future depicted in the "2030 Vision" from blueprint to reality. Editor/Xu Shengpeng