ACWA Power wins 300MW Saudi solar project

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Credit: Acwa

Local firm ACWA Power has been awarded the 300MW Sakaka solar project in Saudi Arabia by the country’s Renewable Energy Project Development Office (REPDO).

Representatives from ACWA Power will sign the power purchase agreement (PPA) for one of the lowest ever solar tariffs of Halala 8.7815/kWh (~US$2.342) with the principal off-taker, the Saudi Power Procurement Company (SPPC), on 7 February in Riyadh.

The project is to reach financial close by 28 February 2018 and start commercial operation in 2019.

H.E. Khalid Al Falih, minister of energy, industry and mineral resources, said: “The project is expected to involve a total private sector capital investment of about US$300 million and will create job opportunities for more than 400 individuals, as Saudi Arabia takes its first step on the road to energy diversification and renewable energy leadership.”

“When the National Renewable Energy Program was launched last year, we set a goal to make it among the most attractive and well-executed government renewable energy investment programs in the world. After a competitive and transparent tendering process, which saw us receive two world record-breaking bids, we can confidently say that we are well on our way to making that a reality, and we look forward to entering the next stage for our National Renewable Energy Program.”

Mohammad bin Abdullah Abunayyan, chairman of ACWA Power, said: “We presented a competitive and integrated offer complying with all required conditions, specifications and standards. The significance of the Sakaka solar PV project lies in it being the first of a series of renewable energy projects in Saudi Arabia, giving a strong kick-off to this vital sector in the near future, and driving the localization of the power generation industry in the Kingdom.

“So, our team has harnessed our expertise to provide the lowest possible tariff worldwide, as well as increasing the local content and training the Saudi capabilities and enabling the industrial and service sectors within the supply chains.”

ACWA and a Marubeni-led consortium were the last two players left in the running, despite Masdar and EDF putting in the lowest ever solar bid during the opening bids last year. PV Tech has already examined what factors may have led to the lowest bid being omitted in an extensive blog. One possibility was the structuring of the finance, or more likely the choice of Masdar to use bifacial solar modules, a technology that would help bring prices down due to extra generation, but which is also mostly untested on a large scale and over a long time period worldwide.

Masdar and EDF were able to put in a bid of ~US$1.78567cents /kWh, which was around 25% lower than ACWA’s 2.342 cent bid on an LCOE basis, roughly the percentage efficiency gains enjoyed by bifacial modules. The Marubeni consortium that lost out this week had originally bid at ~2.66 cents.

Mohammad Abdullah Abunayyan, chairman of ACWA Power, said: “We are proud to have set yet another world record tariff for PV power, now at home and are humbled to be entrusted with the first utility scale renewable energy plant to be developed in the Kingdom, which will be the foundation of the visionary ambitious national program that seeks to maximize the utilization of renewable energy sources, as defined by the National Transition Plan 2020 and the objectives of the Saudi Vision 2030 “.

In a release today, REPDO said the combination of increased local content requirements and the offering of large-to-small scale projects in 2018 provide attractive opportunities for domestic and international investments into renewable energy manufacturing capability in Saudi Arabia. Consequently, it has launched an online portal dedicated to presenting Saudi-based manufacturers to international developers participating in the NREP.

During 2018, Saudi Arabia plans to tender seven solar projects with a combined capacity of 3.3GW and one 800MW wind project.

29 November 2022
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