Saudi Arabia Signs PPA Contracts for Solar Power Deals Worth $665 Million

The Kingdom of Saudi Arabia is bullish on raising the renewable share in its energy mix as it has awarded contracts for two new solar power projects. These projects will make a combined capacity of one gigawatt.

Saudi Arabia is world’s largest oil exporter but has a huge target to add 60GW of solar power to the national grid by 2030. In December 2021, the government had announced that it had planned to invest more than $100bn in renewable energy projects to achieve its global commitment.

With regards to the two solar power projects, Ministry of Energy has informed that the principal buyer and manager of power in the kingdom – Saudi Power Procurement Company (SPPC) has signed two separate deals that include power purchase agreements (PPA) and the worth is $665 million with the winning parties.

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Saudi Power Procurement Company inked a PPA with Ar Rass Solar Energy Company for the 700-megawatt Ar Rass Solar photovoltaic independent power project. The winning company belongs to Acwa Power that is based in Saudi Arabia itself. The solar power project is located in the Qassim region of Saudi Arabia and is valued at 1.7bn riyals.

In the second contract, the SPPC signed a PPA with a Jinko Power led consortium. This is for the Saad Solar PV IPP project located in the Saad area within Riyadh region of Saudi Arabia. The project is for the 300MW capacity and is valued at 800m riyals in the agreement.

The Energy Minister of Saudi Arabia, Prince Abdulaziz bin Salman said, “The award of these projects represents another successful milestone in delivering the National Renewable Energy Programme targets and is a testament to the commitment of the kingdom to reduce energy related emissions.”

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The minister hopes for these moves to help Saudi Arabia to achieve its strategic goal of Vision 2030 as far as energy ecosystem is concerned. He mentioned that the kingdom will develop about 15GW of renewable energy this year and the coming year so that the country reaches the optimal energy mix.

Price Abdulaziz added, “Harnessing renewable energy is an essential part of the endeavour to reach the optimal energy mix.” Saudi Arabia wants to do away with the use of one million barrels of crude that is used to generate power by 2030. The renewable sources of energy will make half of the replacement by the end of this decade.