The Saudi Power Procurement Company (SPPC), under the Saudi Ministry of Energy’s oversight, has begun the qualification process for four major Battery Energy Storage System (BESS) projects with a combined capacity of 2,000 megawatts (MW), equivalent to 8,000 megawatt-hours (MWh) of storage.
The project, which will be structured as independent storage projects, is key in supporting Saudi Arabia’s renewable energy transition and bolstering grid stability as the country targets 50% renewable energy in its mix by 2030.
The projects, each 500 MW/4-hour in size, are strategically located across Saudi Arabia. They include:
- Al-Muwyah BESS in Makkah province
- Haden BESS in Makkah province
- Al-Khushaybi BESS in Qassim province
- Al-Kahafa BESS in Hail province
The projects will follow a build-own-operate (BOO) model, where the successful bidder will have full ownership of a Special Purpose Vehicle (SPV) established to develop and operate each Independent Storage Provider (ISP) project.
The SPV will also enter a 15-year Storage Services Agreement with SPPC, supporting the Kingdom’s renewable energy ambitions by providing consistent and reliable power during peak demand periods.
The battery storage projects are part of Saudi Arabia’s broader Vision 2030 strategy, which seeks to position the Kingdom as a global leader in clean energy.
In recent months, the SPPC has advanced several renewable energy projects, including awarding contracts for large-scale solar projects under the fifth phase of the National Renewable Energy Program (NREP). Solar projects, with a combined capacity of 3,700 MW, involve an estimated SAR 8 billion ($2.13 billion) in investments, were awarded last month alone. The awarded projects include:
- Al-Sadawi Solar PV Project – 2,000 MW
- Al-Masa’a Solar PV Project – 1,000 MW
- Al-Henakiyah 2 Solar PV Project – 400 MW
- Rabigh 2 Solar PV Project – 300 MW
The solar projects are expected to play a crucial role in meeting Saudi Arabia’s renewable energy targets, helping the Kingdom diversify its energy mix and reduce reliance on fossil fuels. The projects will operate under a 25-year Power Purchase Agreement (PPA) with SPPC, ensuring a stable revenue stream for developers while providing low-cost clean energy to the Kingdom.
Beyond solar, the Kingdom recently issued a Request for Qualification (RfQ) for the sixth round of its National Renewable Energy Program, which includes 4.5 GW of solar and wind projects.
This round will further Saudi Arabia’s efforts to transition to a cleaner energy portfolio, with notable projects such as the Dawadmi Wind IPP (1.5 GW). The Kingdom’s ambitious agenda aims to secure between 100 and 130 GW of renewable capacity by 2030.
With SPPC as the Principal Buyer, the Kingdom has already awarded over 19 GW in renewable capacity across various NREP phases, making rapid strides toward its goal of issuing tenders for 20 GW of new renewable projects annually. This focus on clean energy forms part of a larger strategy to establish Saudi Arabia as a renewable energy hub in the Middle East and a key player on the global stage.
The current set of battery storage projects is particularly significant as energy storage solutions become critical in supporting grid stability amid the shift to renewable sources. By enabling excess energy storage during low demand periods, the BESS projects ensure reliable power supply and mitigate the intermittency of solar and wind power, which has traditionally been a challenge for renewable energy systems.
Industry analysts view Saudi Arabia’s ambitious plans for renewable capacity expansion and energy storage as transformative for the region. The projects are seen as part of a strategic pivot from traditional oil dependency towards a diversified energy mix, with storage solutions like BESS playing an essential role in realizing this vision.
Saudi Arabia’s renewables push gained attention when the Kingdom set a global record for low wind energy costs, achieving $15.65 per megawatt-hour (MWh) through recent agreements. Such developments reinforce Saudi Arabia’s commitment to the global renewable energy market, with the Kingdom positioning itself as a leader in driving down costs and scaling up clean energy capacity.
