(Oil Price) – Saudi Arabia has awarded one wind power and four solar power projects in the country worth a total estimated investment of $2.4 billion (9 billion Saudi riyals), the official Saudi Press Agency reports.
Saudi Power Procurement Company, the principal buyer of the projects, awarded the five projects with a total capacity of 4.5 gigawatts (GW), as part of the sixth phase of the Kingdom’s National Renewable Energy Program.
Saudi Arabia, the world’s biggest crude oil exporter, aims to hike the share of renewable electricity generation as part of its Vision 2030 economic development program.
The Kingdom’s National Renewable Energy Program is aimed at diversifying the energy mix used in electricity production by increasing the shares of gas and renewables in it.
“The kingdom aims at have the energy mix that is optimal, most efficient, and least costly, by replacing liquid fuel with natural gas, in addition to renewables, which are going to make up around 50% of the energy mix used to produce electricity by 2030,” the Energy Ministry says.
Of course, replacing liquid fuels and direct crude burn with wind and solar electricity would help Saudi Arabia free up more crude oil for exports, the pillar of its economy and budget revenues.
In the latest $2.4-billion renewable energy tender, Saudi Power Procurement Company awarded a project for the Dawadmi Wind IPP Plant in the province of Riyadh with a capacity of 1.5 GW. The winning bid from a consortium comprising Korea Electric Power Corporation (KEPCO), Nesma Renewable Energy Company Ltd, and Etihad Water and Electricity Company, has a levelized cost of electricity (LCOE) of 1.33803 U.S. cents per kWh. This is a new world record for the lowest LCOE of wind power generation, Saudi Arabia says.
The 1.4-GW Najran Solar Energy Project in the Najran region will be developed in partnership with Abu Dhabi Future Energy Company (Masdar), with an LCOE of 1.09682 U.S cents per kWh. This is the second-lowest in the world for the cost of electricity generation from solar energy, following the Shuaiba 1 Project, which is also located in the Kingdom.
Saudi Arabia expects its total tendered renewable energy generation capacity to reach 64 GW by the end of 2025.
By Charles Kennedy for Oilprice.com
