Saudi Power Procurement Company Signs Major Power Purchase Agreements for 9,200 MW Projects

The Saudi Power Procurement Company (SPPC) has signed Power Purchase Agreements (PPAs) for five Independent Power Producer (IPP) projects, totaling 9,200 MW, in a landmark move aimed at advancing the Kingdom’s energy sector. The agreements were finalized in the presence of Prince Abdulaziz bin Salman bin Abdulaziz, Minister of Energy, and Chairman of the Board of Directors of SPPC.

The new power generation projects include two thermal energy plants — Rumah and Nairyah — which will utilize flexible Combined Cycle Gas Turbine (CCGT) technology. These plants will primarily use natural gas as fuel and are designed to incorporate carbon capture units, contributing a combined 7,200 MW to the national grid.

PPAs for the Rumah 1 and Nairyah 1 plants, each with a capacity of 1,800 MW, were signed with a consortium consisting of ACWA Power, Saudi Electricity Company (SEC), and Korea Electric Power Corporation (KEPCO). The Levelized Cost of Electricity (LCOE) for Rumah 1 is 4.5859 Cents/kWh, while Nairyah 1’s LCOE stands at 4.6114 Cents/kWh. Both plants are scheduled for commercial operation by the second quarter of 2028.

Similarly, the Rumah 2 and Nairyah 2 plants, also with a capacity of 1,800 MW each, secured PPAs with a consortium made up of Abu Dhabi National Energy Company (TAQA), JERA, and Al-Bawani, a local company. The LCOEs for these projects are 4.5613 Cents/kWh for Rumah 2 and 4.4960 Cents/kWh for Nairyah 2. These projects are also expected to begin commercial operations in Q2 2028.

In addition to thermal energy, the Kingdom is also focusing on expanding its renewable energy portfolio. The Al Sadawi Solar Photovoltaic Project, part of the National Renewable Energy Program (NREP) Round 5, will add 2,000 MW to the grid. The PPA for this project was signed with a consortium of Masdar, KEPCO, and GD Power Development Co. The project is expected to begin operations in Q2 2027, with an LCOE of 1.2926 Cents/kWh, one of the most competitive rates in the region.

The combined investment in these projects is estimated at 35 billion Saudi Riyals (approximately 9.3 billion USD). This move aligns with Saudi Arabia’s Vision 2030 goals, which aim to achieve an optimal energy mix by 2030, with 50% of electricity generation sourced from both gas and renewable energy. The Kingdom also plans to reduce its reliance on liquid fuels in the electricity sector.

With the addition of these five projects, Saudi Arabia will have signed agreements for 25 renewable energy projects by the end of 2024, collectively generating 23 gigawatts of electricity. This marks a significant step towards the Kingdom’s ambitious energy goals and solidifies its position as a leader in the global energy transition.