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 US$1 billion 1.1 GW Al Henakiyah Solar Project in Al Madinah province, Saudi Arabia.

The companies secured the contract by submitting the "most cost-competitive bid" of US$16.84/MWh during the fourth round of the National Renewable Energy Program auction in the Middle Eastern country. The project is anticipated to achieve financial closure in early 2024 and is scheduled to be grid-connected in 2025.

The Saudi Public Procurement Company (SPPC), a government entity responsible for awarding energy project tenders, has indicated that the project's levelized cost of electricity (LCOE) stands at SAR 6.31575 (US$1.68420)/kWh. Masdar, a Saudi Arabian renewable energy company, EDF Renewables, a subsidiary of the French utility EDF Group specializing in renewable energy projects, and Nesma Home Company, a venture capital firm based in Saudi Arabia, are the involved entities. Saudi Arabia has set a target to generate 50% of its energy from renewables by 2030.

Key features of the 1.1 GW Al Henakiyah Solar Project:

• One of the largest solar photovoltaic (PV) projects in the world;
• Will use over 3 million solar panels;
• Will generate enough electricity to power over 190,000 homes in Saudi Arabia;
• Expected to offset over 168,000 tons of CO2 emissions per year; and
• A major step forward for Saudi Arabia's renewable energy goals.