Saudi Arabia’s government entity tasked with procuring electricity generation projects has commenced the qualification process for a 2GW/8GWh battery storage tender.
Saudi Power Procurement Company (SPPC), licensed as the sole buyer of electrical energy and capacity from sources within the Kingdom, made the announcement on Monday (4 November).
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SPPC is soliciting bids for the development of four battery energy storage system (BESS) projects, each with 500MW output and 2,000MWh storage capacity.
Storage Services contracts with 15-year terms will be awarded on a build-own-operate (BOO) model, with bidders holding 100% equity in special purpose vehicle (SPV) companies set up for the development and operation of projects.
The SPPC tender, administered by the Saudi Ministry of Energy, runs alongside the National Renewable Energy Program (NREP). The procurement company is currently holding the fifth round of NREP auctions and recently shortlisted bids for four solar PV projects totalling 3.6GW of generation capacity, as reported by our colleagues at PV Tech.
Under Saudi Arabia’s Vision 2030 policy roadmap, the oil-wealthy country aims to have a 50% share of renewable energy in its electricity mix by 2030.
According to energy minister Prince Abdulaziz bin Abdullah Al Saud, speaking in 2021, the government is expected to spend around US$293 billion on power and energy projects by that time. The biggest share will be spent on transmission upgrades and renewable energy, with a smaller investment in the distribution network.
SPPC said on Monday that the newly launched BESS procurement programme will enable Saudi Arabia to reach that 50% goal, with the current tender representing the first tranche of solicitations.
Bidders must have power IPP or BESS project experience
The locations for the four BESS facilities, dubbed independent storage projects (ISPs) by SPPC, have been decided. Two will be deployed in Makkah province, one in Qassim province, and the other in Hail province.
Qualified bidders will have until midday, 25 November 2024, to respond to the request for information (RFI) and request for qualification (RFQ). Bid applicants must include both a Managing Member and Technical Member, although these could be the same entity if eligible.
Managing Members must have experience in project development including financing, or be a significant shareholder in independent power producer (IPP) or BESS projects which are operational.
It needs to have been involved in either conventional or renewable IPP or BESS projects with a minimum 500MW capacity in operation for which it acted as the developer or significant shareholder within the last 15 years, or a minimum of 200MWac projects if renewables only over the same timeframe, or 50MW of BESS projects within the last five years.
Technical Members also need to have a track record of delivering projects, as set out in tender documents, including design, procurement, construction and operation of conventional or renewable IPP projects or battery storage.
Managing Members must have a tangible net worth of at least US$100 million, while for Technical Members the threshold is US$50 million and above.
Large-scale battery storage projects announced to date in Saudi Arabia include what has been described as the world’s largest off-grid BESS for a new luxury resort on the Red Sea Coast, a 536MW/600MWh system for the new-build Neom ‘smart city’ development, and a solar-plus-storage off-grid project for another ‘megatourism’ development, this time paired with solar PV.
Chinese BESS-specialised battery manufacturer Hithium recently announced that it intends to build a factory with 5GWh annual production capacity in Saudi Arabia in a joint venture (JV) with MANAT, a Saudi engineering firm.
