Saudi Arabia launches third renewables round as it looks to diversify power mix

The world's largest oil exporter looks to free up more crude for export

A Saudi man walks on a street past a field of solar panels at the King Abdulaziz city of Sciences and Technology, Al-Oyeynah Research Station, May 21, 2012. Saudi Arabia, the world's top oil exporter, may finally be getting serious about overcoming the technical and financial hurdles for tapping its other main resource: sunshine. Saudi Arabia wants to generate much more solar power as it lacks coal or enough natural gas output to meet rapidly rising power demand. Doing so would allow it to slash the volume of oil it burns in power plants bankrolled by billions of dollars worth of saved oil earnings. Picture taken May 21, 2012. To match story SAUDI-SOLAR/  REUTERS/Fahad Shadeed   (SAUDI ARABIA - Tags: ENERGY BUSINESS) - RTR32IDZ
Powered by automated translation

Saudi Arabia has launched the third round of its renewable energy programme, which aims to add a total of 1.2 gigawatt of solar photovoltaic power capacity to the grid.

The round will include two categories for renewable power with Category A including the 80 megawatt Layla scheme as well as the 120MW Wadi Al Dawaser project. Meanwhile, category B includes the 300MW Saad scheme as well as the 700MW Ar Rass project.

The projects will require a minimum contribution of at least 17 per cent local content, according to Faisal Alyemni, the head of the Renewable Energy Project Development Office (Repdo), within the Saudi energy ministry.

Saudi Arabia, the world's largest oil exporter, is looking to diversify its energy mix by adding cleaner sources of power, while freeing up more oil for export. The kingdom has an ambitious renewables strategy and plans to add 60GW of clean energy capacity to the grid by 2030. Of this, 40GW will come from solar photovoltaic, 16GW from wind and 2.7GW from concentrated solar power.

Repdo, which earlier announced a second round of renewable projects with a total capacity of 1.47GW, will close a request for proposals for this phase on January 20. The ministry will receive proposals for the third round on February 3, with the request for qualifications closing on February 6.

Saudi Arabia recently revised its renewable energy target from 9.5GW to 27.3GW to be achieved by 2024.

Around 70 per cent of renewable schemes in the kingdom will be executed by the sovereign Public Investment Fund, while the remainder will be awarded through Repdo.

Saudi Arabia awarded the kingdom's first utility-scale solar PV plant to Riyadh-based Acwa Power for a record low tariff of US Cents 2.3417/kWh (8.781 halalas/kWh) in 2018.

The $302 million (Dh1.1bn) Sakaka plant will be developed on the basis of an independent power producer model and is backed by a 25-year power purchase agreement with the Saudi Power Procurement Company.

Saudi Arabia is also set to become the Middle East's biggest wind power market in the next decade. The kingdom will account for almost half of the region's wind capacity additions by 2028.

Developers will build 6.2GW of wind capacity – or 46 per cent of the region’s total wind capacity addition – between 2019 and 2028, according to Wood Mackenzie Power & Renewables.

The kingdom's first wind power project, costing $500m reached a financial close in July. The 400-MW wind farm is being executed by a consortium led by France's EDF and Masdar.