ACWA wins Saudi Arabia’s 300 MW solar tender

The Saudi energy company submitted the second lowest bid, an LCOE of 0.08872 SAR ($0.0236) per kWh, while the excluded competitor, a consortium led by Japan’s Marubeni, had offered 0.09976 SAR ($0.0266) per kWh.

Saudi Arabia's energy future is likely to diversify into more solar, wind and nuclear.

Image: Saudi Renewable Energy Development Office

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Saudi Arabia’s Renewable Energy Project Development Office (REPDO) has announced that Saudi energy group, ACWA is the final winner of the 300 MW solar tender it launched in February.

ACWA had been shortlisted along with a consortium formed by Japanese trading company Marubeni Corp., Khaled Ahmed Juffali Energy & Utilities Limited and Axia Power Holdings BV for the final phase of the tender in early January.

REPDO said that ACWA will now have to sign the 25- year PPA for the 300 MW project with the Saudi Power Procurement Company (SPPC) on February 7.

“The development of the 300 MW Sakaka solar PV project is expected to involve a total private sector capital investment of about $300 million, and will create job opportunities for more than 400 people,” said Saudi Minister of Energy, Industry and Mineral Resources, Khalid Al Falih.

ACWA had submitted the second lowest bid, an LCOE of 0.08872 SAR ($0.0236) per kWh, after the record offer of French energy giant EDF, which bid an LCOE of only 0.06697 SAR ($0.0178) per kWh,.

This offer, however, was not shortlisted for the final phase. The second excluded shortlisted bidder, a consortium formed by Japanese trading company Marubeni Corp., Khaled Ahmed Juffali Energy & Utilities Limited and Axia Power Holdings BV, had offered a price of 0.09976 SAR ($0.0266)/kWh.

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In addition, another four bidders had offered prices under the $0.03 per kWh threshold: French energy group, Engie with 0.10393 SAR ($0.0277) per kWh; Japanese engineering company, JGC Corporation with 0.10441 SAR ($0.0278) per kWh; Japan-based industrial conglomerate, Mitsui with 0.10710 SAR ($0.0285) per kWh; French oil group and SunPower’s largest shareholder, Total with 0.10722 SAR ($0.0285) per kWh.

The solar plant will have to be built with a 30% quota of locally manufactured PV components.

“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,” stated ACWA chairman Mohammad bin Abdullah Abunayyan.

The government of Saudi Arabia has recently announced it will tender PV projects with a combined capacity of 3.3 GW this year.

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