Saudi Arabia plans to set new long-term RE targets, and to resume tenders

Time: 2019-01-04
Saudia Arabia’s solar PV development has been big on announcements and light on real tenders and projects. This could be set to change with a more clear roadmap for renewable capacity expected this year.

The Renewable Energy Project Development Office (REPDO) of Saudi Arabia was expected to launch tenders for 4.1 GW of renewable energy capacity in 2018, including 3.3 GW of solar and 800 MW of wind. These tenders, however, never materialized.

At the same time, an astonishing announcement for what could become the world’s largest solar complex was made by the Saudi government and Japan-based SoftBank in March. The two parties unveiled a plan to develop a 200 GW project in the frame of the Saudi 2030 Vision strategy – a target of which is to attract major foreign investment to Saudi Arabia.

A local renewable sector source told pv magazine that the reason of the delay of the expected tenders were linked to the huge Softbank project, which would require a massive expansion of the country’s renewable energy program. “More clarity on this growth will be given in the near future,” the source said. “As a result of this growth, far bigger and far more projects will be tendered on annual capacity. Therefore, the execution program will have to be adjusted in order to meet the new directions of growth,” the source also explained.

The first tenders may be launched once new long-term renewable targets are announced by Saudi authorities. The announcements may even come in the next few weeks at a ministerial level, the source said.

The SoftBank 200 GW solar program too has be mired in delays and speculation. In early October, the Saudi government refuted claims that it was being scrapped. “Contrary to recent media reports, MEIM alongside the Public Investment Fund, SoftBank and other Kingdom’s stakeholders continue to work on a number of large-scale, multi-billion dollar projects relating to the solar industry,” said the Saudi Ministry of Energy, Industry and Mineral Resources (MEIM) at the time.  “The long-term goal of these investments is to manufacture 200 GW of PV capacity by 2030,” the spokesperson added.

The first and so far only solar tender held by the Saudi government was that for the 300 MW Sakaka solar PV project. Awarded in February to Saudi energy company ACWA, the project has recently attracted $320 million in financing from France-based financial services provider Natixis. ACWA won the tender despite submitting the second lowest bid of SAR 0.08872 ($0.0236) per kWh, with the lowest bid being proposed by French energy giant EDF, which offered SAR 0.06697 ($0.0178) per kWh. The EDF bid remains the world’s lowest ever made for a large-scale solar project to date.

Saudi Arabia has set a target of deploying 9.5 GW of wind and solar capacity by 2023.

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