A consortium led by Saudi Arabia’s Acwa Power has sealed a 25-year power purchase agreement (PPA) to sell the output of a 1.5-GW solar complex in Sudair to the Saudi Power Procurement Company.
The Sudair solar project is being developed by Acwa Power, in which the Public Investment Fund (PIF) owns a 50% stake, and Water and Electricity Holding Company Badeel, a fully-owned portfolio company of the sovereign wealth fund. The tie-up announced the PPA signing on Thursday when it officially launched the SAR-3.4-billion (USD 906.7m/EUR 762.3m) project.
The deal is one of seven newly-signed PPAs for roughly 3 GW of fresh solar PV capacity that will go online in the Kingdom.
Set to become one of the country’s largest single-contracted photovoltaic (PV) parks, the complex will sell electricity at USD 0.01239 (EUR 0.0084) per kWh — the second-lowest tariff globally. Its initial commissioning is scheduled for the second half of next year. Once fully operational, the solar farm will be capable of producing electricity that will be enough to meet the demand of around 185,000 homes per year.
The independent power producer (IPP) project is being implemented in line with PIF’s commitment to deploy 70% of the renewable energy capacity as part of Saudi Arabia’s Vision 2030 plan. Under the programme, the Kingdom aims at reaching an installed renewables capacity of 58.7 GW, with solar PV accounting for 40 GW.
This week marked the inauguration of the country’s first utility-scale renewable energy plant. The 300-MW Sakaka solar farm is also owned by a consortium led by Acwa Power.