BE2C2 Report: Irshad Salim, Jun 16, 2016 — Saudi Electricity Co. (SEC) said it is inviting expressions of interest from local and international companies or consortiums to build two solar power plant in the kingdom; the firms would invest in the plants and sell electricity to SEC in deals that could become models for future infrastructure projects under Saudi Arabia’s economic reform plan.
The announcement led SEC shares climb 2.5 percent on Monday, according to Arab News.
The news comes as Saudi Aramco and GE announced they are partnering to install Saudi Arabia’s first Wind Turbine at the Turaif Bulk Plant, located in the north-west of the Kingdom.
The demo Wind Turbine to be installed will allow the displacement of diesel that is used for power generation in the plant.
Both the initiatives are in line with Saudi Vision 2030 as endorsed by the Saudi Cabinet that has set an initial target of generating 9.5 gigawatts (GW) of renewable energy.
The two 50MW solar power plants are planned in Al-Jouf and Rafha in the northern part of the country.
As much as 50 megawatts of solar power capacity will be developed at each site on land provided by SEC, and the developers will sell the electricity to SEC under long-term agreements.
The tender is the first by the Kingdom to seek international partners to cooperate in building and operating renewable-energy facilities, according to the Middle East Solar Industry Association.
One Gulf power industry executive estimated that each plant might cost between $100 million and $120 million to build.
HSBC Holdings Plc’s Saudi unit is acting as financial consultant for the tender, DLA Piper is legal adviser, and DNV GL is technical consultant, Saudi Electricity said.
In April, Saudi Arabia said it planned to generate 9.5 gigawatts of electricity from renewable energy by 2030 which would help to conserve its oil production for export rather than use in power generation.
Saudi Arabia has planned take advantage of its ample sunlight and to diversify energy supply amid rising demand.
The government is also counting on increased output of natural gas and shale gas to help cut its reliance on crude oil.
Minister of Energy, Industry and Mineral Resources Khaled al-Falih has said that under the National Transformation Program, Saudi Arabia will be “a very strong competitor in renewable energy,” and will implement “massive” projects to produce more natural gas, while increasing non-oil exports.