Acwa Power consortium signs $8.3b Saudi renewable energy deals

Saudi Arabia’s Principal Buyer has signed power purchase agreements totaling SAR 31 billion (US$8.3 billion) with a consortium led by Acwa Power.

This initiative includes seven renewable energy projects aimed at delivering a combined capacity of 15,000 megawatts (MW) as part of the National Renewable Energy Program under the Ministry of Energy.

The consortium comprises ACWA Power, the Water and Electricity Holding Company (Badeel), and Aramco Power.

The agreements were signed in the presence of Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, the Minister of Energy and Chair of the Principal Buyer’s Board.

The projects include five photovoltaic solar installations and two wind energy projects.

🔗 Source: Zawya

🧠 Food for thought

1️⃣ Saudi Arabia’s renewable announcements: A history of ambitious goals versus actual implementation

The $8.3 billion ACWA Power consortium deal represents the latest chapter in Saudi Arabia’s pattern of bold renewable energy announcements dating back nearly a decade.

In 2013, King Abdullah City for Atomic and Renewable Energy announced plans for 54 GW of renewable energy by 2032, but progress was minimal in the following years 1.

Similarly, a highly publicized $200 billion solar project announced in March 2018 was canceled just seven months later, highlighting the gap between announcements and implementation 2.

As of 2023, renewables accounted for only about 1% of Saudi Arabia’s electricity generation, with just 2.7 GW of installed renewable capacity compared to 97 GW of oil and gas plants 3.

These new projects, totaling 15,000 MW, would significantly advance Saudi Arabia’s renewable goals if completed, potentially helping the Kingdom move toward its Vision 2030 target of generating 50% of power from renewable sources 4.

The signing of power purchase agreements for these seven projects provides more concrete commitment than previous announcements, though the implementation timeline and actual construction progress will be crucial to watch.

2️⃣ Saudi renewable energy prices achieve globally competitive levels

The remarkably low levelized cost of energy (LCOE) figures in the ACWA Power deals—as low as 1.25959 US cents per kWh for the Afif 2 Project—demonstrate Saudi Arabia’s emergence as a price leader in renewable energy.