The Saudi Power Procurement Company (SPPC) has entered into two power purchase agreements (PPAs) with a consortium led by the Japanese conglomerate Marubeni Corporation. These agreements are set to procure power from two pivotal wind projects: the 600MW AlGhat project and the 500MW Wa’ad Alshamal project.
Part of Saudi Arabia’s National Renewable Energy Program
These developments are a significant component of Round 4 of the Saudi National Renewable Energy Program (NREP), overseen by the Kingdom’s Ministry of Energy. The PPAs were formalized during the Saudi-Japan Vision 2030 Business Forum, with SPPC acting as the principal buyer.
Record-Breaking Wind Power Costs
A notable aspect of these agreements is the unprecedented low costs achieved for wind power. Prince Abdulaziz Bin Salman bin Abdulaziz Al Saud, the Saudi Minister of Energy, announced that the AlGhat project set a new global record with a cost of 1.56558 cents per kilowatt-hour (kWh) for electricity production from wind power. The Wa’ad Alshamal project followed closely, achieving the second lowest cost worldwide at 1.70187 cents/kWh.
Powering Residential Units
The impact of these projects is substantial, with the electricity generated expected to power approximately 257,000 residential units annually. This achievement underscores the importance of these wind projects in enhancing energy efficiency and sustainability in Saudi Arabia.
Vision 2030 and Renewable Energy Goals
Prince Abdulaziz praised the leadership of King Salman and Crown Prince Mohammed bin Salman for their support and guidance, which have been crucial in driving the Ministry of Energy and the broader energy sector towards achieving the ambitious Vision 2030 targets. These targets include significantly increasing the share of renewable energy in the Kingdom’s energy mix.
National Renewable Energy Program
The projects are part of the broader National Renewable Energy Program, which aims to leverage Saudi Arabia’s vast lands to harness renewable energy resources. The program’s goal is to elevate the proportion of renewables in the energy mix to approximately 50 percent by 2030.
In conclusion, the SPPC’s agreements with Marubeni Corporation mark a significant milestone in Saudi Arabia’s renewable energy journey. By achieving record-low costs for wind power and making substantial contributions to residential energy supply, these projects reflect the Kingdom’s commitment to sustainable energy solutions and its Vision 2030 objectives.
