Saudi Power Procurement Company (SPPC) announced on August 21, 2026 that it has signed service agreements for four Battery Energy Storage System (BESS) projects located in the Makkah and Hail regions with a consortium of Saudi Energy Company, ACWA Power, and Al Sharif Contracting, and a separate consortium led by ENGIE. The contracts mark Saudi Arabia’s first Group 1 Build-Own-Operate (BOO) battery storage projects, with total investment reported at approximately $1.16 billion.
The projects are not power plants themselves but grid-connected battery storage infrastructure designed to offset the intermittency of renewable energy sources such as solar power. The project sites include Al Muwaih, Haden, and Al Qahafah in the Makkah and Hail regions, with the Saudi Energy Company-ACWA Power-Al Sharif Contracting consortium and the ENGIE consortium each awarded a share of the four projects. Specific battery technology or equipment suppliers have not been disclosed.
The combined capacity of the four projects is 2,000MW/8,000MWh, consisting of four 500MW units each with four hours of storage duration. Total investment is reported at SR4.35 billion (approximately $1.16 billion).
The BESS awards are reported to be linked to Saudi Arabia’s policy of expanding solar and other renewable power generation, which requires grid-scale storage infrastructure to absorb the resulting output variability. As the first Group 1 BOO project, it is expected to serve as a benchmark for subsequent group awards.
This contract illustrates that large-scale grid storage infrastructure procurement is accelerating in the Gulf alongside renewable energy expansion. The participation of established power and renewable energy developers such as ACWA Power and ENGIE in consortium form reflects a broader trend of power developers extending their portfolios into storage infrastructure. As the first group award under the BOO model, the contract structure and pricing level of this project are expected to serve as a reference point for EPC contractors, battery suppliers, and equipment vendors bidding on similar BESS projects going forward. Regions with high solar power penetration are seeing increased procurement of four-hour storage systems to cover evening peak demand, and this project reflects that same pattern. Saudi Arabia is reported to be expanding its practice of bundling generation and storage procurement to meet its renewable energy targets, which is expected to continue drawing interest from market participants.
Attention is focused on whether the groundbreaking and commercial operation dates for the four BESS projects will be disclosed. Whether SPPC will award additional BESS projects beyond this Group 1 tranche is also a point to watch. Whether battery cell and system supplier selections will follow as a subsequent procurement step, and whether other Gulf countries will pursue similar BOO-model BESS programs, are also drawing industry attention.