Two bids shortlisted in Saudi Arabia's first utility-scale solar tender

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The Renewable Energy Project Development Office (REPDO) within the Ministry of Energy, Industry and Mineral Resources in Saudi Arabia has shortlisted two bids to develop a 300MW solar photovoltaic plant in Sakaka, Al Jouf. This is the first competitively tendered utility-scale solar project in the country.

As reported on this platform, REPDO issued the RFQ for the project in February 2017. 27 consortia were announced as having prequalified in April. In October, REPDO received eight bids.

The shortlist comprises ACWA Power and a consortium including Marubeni Corporation, Khaled Ahmed Juffali Energy & Utilities Limited and Axia Power Holdings BV, a wholly-owned subsidiary of Marubeni Corporation.

This is surprising, given that REPDO published that the lowest bid was made by EDF Energies Nouvelles and Abu Dhabi-based developer Masdar. Their bid was 24% cheaper than the second-lowest, made by ACWA Power.

The successful bidder will be responsible for the development, design, engineering, financing, procurement, construction, commissioning, testing, completion, ownership, insurance, operation and maintenance of the plant. They will also sign a 25-year power purchase agreement (PPA) with the Saudi Power Procurement Company (SPPC).

REPDO detailed that it will award the project this month, while the deadline for financial close is set for February 2018.

The project is part of Round 1 of the National Renewable Energy Program (NREP), a strategic initiative under Saudi Arabia's Vision 2030 and the National Transformation Program (NTP). It aims to substantially increase the share of renewable energy capacity in the total energy mix within the country to 9.5 GW by 2023.

The initial target of 3.45 GW renewable energy capacity by 2020 will be met through three rounds of tendering that will procure a mix of wind, solar PV, concentrated solar power (CSP) and waste-to-energy technology. This project was tendered in a 700 MW tender alongside the 400MW Dumat Al Jandal wind project. NREP plans to tender 1.02GW and 1.73GW in the next rounds.

The NREP also sets out a systematic and targeted road map to rapidly diversify the domestic power supply, catalyze economic development and support long-term prosperity in line with Vision 2030’s goals which include creating a new renewable industry and support the buildup of this promising sector.