The Saudi Power Procurement Company (SPPC), also known as the “Principal Buyer,” has signed storage service agreements for the first group of four battery energy storage system (BESS) projects. It is reported that the combined investment for the four projects totals US$1.16 billion (approximately SAR4.35 billion), with a combined storage capacity of 2,000MW at four-hour duration, equivalent to 8,000MWh.
It is reported that the agreements were signed on August 21 in Riyadh, in the presence of Prince Abdulaziz bin Salman, Minister of Energy, Minister of Industry and Mineral Resources, and Chairman of the Board of Managers of the Saudi Power Procurement Company. Three projects — the Al Muwyah BESS and Haden BESS in the Makkah region, and the Al Kahafa BESS in the Hail region — were reportedly awarded to a consortium comprising Saudi Energy, ACWA Power and Al Sharif Contracting and Commercial Development Company. The Al Khushaybi BESS in the Qassim region was awarded to a consortium of ENGIE and Haji Abdullah Alireza and Co. It is reported that all four projects share an identical specification of 500MW with four-hour storage duration, and will be developed under a build-own-operate (BOO) model. The original disclosures do not name specific suppliers of battery cells or power conversion systems, so this information remains unconfirmed.
It is reported that the BESS projects are intended to support Saudi Arabia’s target of achieving an electricity generation mix of approximately 50% renewable energy by 2030, and are expected to reduce reliance on conventional generation during periods of peak demand. The Saudi Power Procurement Company is reported to oversee the entire process, from pre-development feasibility studies through the tendering of generation and storage projects to the signing of power purchase and storage service agreements. It is reported that the Saudi Power Procurement Company operates under a “Principal Buyer” structure in which a single entity manages the entire process, and this marks the first dedicated BESS program to reach agreement under that structure.
Implications for Korea’s Industry
It is reported that the continued flow of large-scale BESS awards in the Middle East is seen as a potential business opportunity for Korean companies supplying battery cells and related materials and components.
It is reported that the Saudi Power Procurement Company has referred to these four projects as its “Group One” BESS program, suggesting that further rounds of BESS tenders may follow.