Consortium signs 25-year PPA for 1.1 GW of solar capacity in Saudi Arabia

Masdar, EDF Renewables and Nesma Company have signed a 25-year power purchase agreement (PPA) with Saudi Power Procurement Co. (SPPC) to develop the 1.1 GW Al Henakiyah Solar Project in Saudi Arabia.

The three companies behind the 1.1 GW Al Henakiyah Solar Project in western Saudi Arabia – Masdar, EDF Renewables and Nesma Company – said this week that they have signed a 25-year PPA with government-managed SPPC to develop the $1 billion Al Henakiyah Solar Project.

According to the press release, the companies won the contract after submitting “the most cost-competitive bid” of $16.84/MWh as part of the fourth round of the Middle Eastern country’s National Renewable Energy Program auction. The plant is expected to reach financial close in early 2024 and will be connected to the grid in 2025, the announcement stated.

SPPC, a government-run department tasked with granting energy project tenders, said in its own press release that the project’s levelized cost of electricity (LCOE) is SAR 6.31575 ($1.68420)/kWh.

Masdar is a renewable energy company based in Saudi Arabia. EDF Renewables develops renewable energy projects and is a subsidiary of France-based utility EDF Group. Nesma Home Company is a venture capital company based in Saudi Arabia.

The two announcements did not specify what solar technology would be used and on what date the agreement was signed.

In 2020, Saudi Arabia derived 51% of its energy supply from gas and 49% from oil, according to the International Renewable Energy Agency (IRENA). The country has increased its installed solar capacity since that year – only 59 MW – to 389 MW in 2021 and 390 MW in 2022, according to other IRENA stats.

Saudi Arabia plans to generate 50% of its energy from renewables by 2030.