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Abu Dhabi, UAETuesday 11 December 2018

Saudi Arabia expected to break ground on first wind project this year, Acwa CEO says

Kingdom could tender up to 11 renewables bids totalling nearly 4GW

A field of solar panels at Saudi Arabias King Abdulaziz City of Sciences and Technology. The kingdom is expected to tender around 4GW worth of renewables projects. Fahad Shadeed / Reuters
A field of solar panels at Saudi Arabias King Abdulaziz City of Sciences and Technology. The kingdom is expected to tender around 4GW worth of renewables projects. Fahad Shadeed / Reuters

Saudi Arabia’s first wind project is expected to start construction this year, with the kingdom’s newly established renewables agency set to launch 11 solar and wind new tenders, according to the chief executive of Saudi utilities developer Acwa Power.

"The wind project should not only be awarded this year, it should go to construction this year. I expect it to be awarded and in financial close this year,” Paddy Padmanathan of Acwa Power, which is bidding for the 400-megawatt wind project, told reporters in Dubai.

Saudi Arabia tendered the wind project along with a 300MW solar photovoltaic project in its first renewables round last year.

The world’s top oil exporter has embarked on an ambitious renewables programme that will see around 3.25 gigawatt of solar and 800MW of wind in the second cycle this year, as the Opec member looks to free up more crude for export.

The wind and solar capacities to be tendered this year form part of a larger strategy to add up to 9.5GW renewables power to the grid by 2023.

Mr Padmanathan, whose company is currently executing the kingdom’s solar PV project at Sakaka, is confident of seeing more tenders this year.

"I expect 11 tenders this year in renewables - 8 eight PV and two wind. Obviously not all of them will be awarded this year, knowing some of them will be submitted,” he said at Seih Al-Dahal in Dubai, where an Acwa Power-led consortium broke ground for the fourth phase of a solar park.

Apart from tenders from the newly-established renewable energy project development office within the Saudi energy ministry, the country is expected to develop a strategy to supply renewables power to the industrial sector, with the $500 billion planned Neom mega-city also expected to disclose its renewables strategy, he added.

Saudi Arabia, which is set to develop its renewables strategy with a focus on local content, will look at increasing the share of such content in its wind and solar projects, he said.

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Mr Padmanathan expected the share of local content to “ratchet up to 45 per cent” from the current share of 30 per cent, as seen in Sakaka, with the Saudi energy ministry expected to raise the share incrementally in the future.

While the Saudi renewables programme has so far focused on deploying solar PV, the kingdom could see potential to tender up to 1GW of concentrated solar power capacity next year.

“The 9500MW will be all PV but they have said in some statements that they will now evaluate CSP,” he added.

Elsewhere, Acwa Power will submit commercial bids for the 800MW Noor Midelt hybrid PV-CSP programme in Morocco - the first of its kind to combine both technologies in the region. The project, which is currently evaluating technical bids from three bidders - France’s EDF, GDF/Engie and Acwa - is expected to be awarded this year, added Mr Padmanathan.

Acwa is also closely watching renewables tenders in Oman, PV projects in Abu Dhabi and will work to complete three solar PV plants currently under construction in Egypt this year.