Saudi Power Procurement Company (SPPC), the exclusive licensed buyer of electricity in Saudi Arabia, has launched the qualification process for a major 2GW/8GWh battery energy storage system (BESS) tender. This move marks a significant step in Saudi Arabia’s national battery storage ambitions.
Four Battery Storage Projects Across Three Provinces
According to the announcement, the SPPC tender covers four independent storage projects (ISPs), each designed to deliver 500MW output with 2,000MWh storage capacity. The projects will operate on a build-own-operate (BOO) basis with 15-year storage services contracts. Each successful bidder will hold 100% equity in special purpose vehicle (SPV) companies created for the development and operation of these storage facilities.
SPPC disclosed the locations for the four BESS facilities, which will be in the provinces of Makkah (two locations), Qassim, and Hail. Qualified bidders have until midday on November 25, 2024, to submit their response to the Request for Information (RFI) and Request for Qualification (RFQ).
Driving the 2030 Energy Transition
This battery storage tender is managed under the guidance of the Saudi Ministry of Energy and aligns with the National Renewable Energy Program (NREP). Currently, Saudi Arabia is conducting the fifth round of NREP auctions, aiming to add 3.6GW of solar PV generation capacity. Saudi Arabia’s Vision 2030 plan targets a 50% share of renewable energy in its electricity mix by 2030, with substantial investment in renewable energy projects and grid infrastructure upgrades.
Energy Minister Prince Abdulaziz bin Abdullah Al Saud highlighted in 2021 that the Saudi government is projected to spend around US$293 billion on power and energy projects by 2030, with the majority focused on transmission upgrades and renewable energy, and a smaller share allocated to distribution networks.
SPPC stated that this newly launched BESS procurement program will support Saudi Arabia in reaching its 50% renewable energy goal. The current 2GW tender represents the first phase of SPPC’s battery storage solicitations.
Bidder Qualification Requirements
SPPC has established specific qualification requirements for bidders. Candidates must have experience as independent power producers (IPP) or in battery storage projects. Managing Members must have a background in project development, including financing, or be a significant shareholder in IPP or BESS projects. They need to have experience in either conventional or renewable IPP or BESS projects with a minimum capacity of 500MW in the last 15 years, or at least 50MW of BESS experience in the last five years. Technical Members must have a proven track record in designing, procuring, constructing, and operating conventional or renewable IPP or BESS projects.
Additionally, Managing Members must have a tangible net worth of at least US$100 million, while Technical Members must have a net worth of at least US$50 million.
Progress in Saudi Arabia’s Battery Storage Initiatives
In recent years, Saudi Arabia has announced several large-scale storage projects, including what is said to be the world’s largest off-grid BESS for a luxury resort on the Red Sea coast, a 536MW/600MWh system for the new Neom ‘smart city,’ and a solar-plus-storage off-grid project for a major tourism development. Moreover, Chinese battery manufacturer Hithium recently announced a joint venture with Saudi engineering firm MANAT to establish a 5GWh battery production facility in Saudi Arabia, further supporting the country’s growing battery manufacturing industry.
