SPPC Awards 7,200 MW IPP Contracts to Global Consortia

The Saudi Power Procurement Company (SPPC) has announced the winning bidders for four major conventional independent power producer (IPP) projects — Rumah-1, Rumah-2, Al-Nairyah-1, and Al-Nairyah-2 — with a combined capacity of 7,200 megawatts (MW), in a move that reinforces the Kingdom’s energy transition under the supervision of the Ministry of Energy. The announcement, released via the Saudi Press Agency (SPA), marks a significant step in Saudi Arabia’s drive to diversify its electricity generation mix, displace liquid fuels, and meet future load demand through a balanced combination of renewable energy and natural gas.

Under the plan, renewable energy and gas are each expected to contribute 50 percent of electricity production by 2030. The four projects, each with a capacity of 1,800 MW, will be developed on a build, own, and operate (BOO) basis, with SPPC entering into 25-year power purchase agreements (PPAs) with the project companies. Total investment in the projects is estimated at around SAR 30 billion (approximately USD 8 billion), underscoring the scale of the Kingdom’s power sector expansion and its appeal to international investors. The winning consortia bring together leading Saudi, regional, and global energy companies, reflecting the collaborative approach that underpins the Kingdom’s energy strategy.

Context and Background

Why does this announcement matter for Saudi Arabia’s long-term energy planning? The four IPP projects are a direct outcome of the energy mix plan supervised by the Ministry of Energy, which aims to optimise electricity production by combining renewable energy and natural gas in equal measure by 2030. This strategy is designed to meet rising demand from population growth, industrial expansion, and the Vision 2030 economic diversification agenda, while reducing reliance on liquid fuels that are more valuable when exported or used in petrochemicals.

The projects also align with the Saudi Green Initiative, which seeks to achieve net-zero greenhouse gas (GHG) emissions through the circular carbon economy approach by 2060 or earlier, depending on technology availability. By incorporating the latest Class H/J gas turbines in combined cycle operation — the most efficient available — and by enabling carbon capture utilisation and storage (CCUS) readiness, the plants are designed to deliver reliable power with a lower carbon footprint than older technologies. The plan further aims to localise gas turbine manufacturing, creating industrial opportunities and supporting local content requirements.

SPPC, a company licensed by the Saudi Electricity Regulatory Authority, is responsible for preparing preliminary studies, tendering, and awarding IPP projects, as well as purchasing electrical energy from IPPs in the Kingdom. Its role is central to structuring bankable projects that attract world-class partners. The announcement therefore represents both a procurement milestone and a signal of Saudi Arabia’s commitment to a transparent, competitive, and well-regulated power sector.

Key Details of the Winning Consortia

How are the four projects structured, and who will build them? The first consortium, awarded the Rumah-1 plant (1,800 MW), comprises the Saudi Electricity Company (SEC) as managing and technical member, alongside ACWA Power and Korea Electric Power Corporation (KEPCO) as consortium members. The same consortium has also been awarded the Al-Nairyah-1 plant (1,800 MW), with SEC again leading as managing and technical member, and ACWA Power and KEPCO participating as members. This pairing leverages SEC’s deep experience in the Saudi grid, ACWA Power’s global leadership in power and water desalination, and KEPCO’s technical expertise in large-scale generation.

The second consortium, which secured the Rumah-2 and Al-Nairyah-2 plants (each 1,800 MW), brings together Abu Dhabi National Energy Company PJSC (TAQA) as managing and technical member, JERA as technical member, and Al-Bawani as consortium member. TAQA’s regional strength, JERA’s global experience in LNG and high-efficiency thermal generation, and Al-Bawani’s established construction capabilities in Saudi Arabia create a complementary partnership. The involvement of these international and regional players highlights the confidence of global investors in the Kingdom’s regulatory framework and long-term energy demand outlook.

Each project will be developed on a BOO basis, meaning the winning consortia will finance, build, own, and operate the plants, selling electricity to SPPC under 25-year PPAs. The projects will adhere to localisation and local content requirements, contributing to Saudi Arabia’s economy through job creation, supply chain development, and technology transfer. Together, the four plants will supply enough electricity to power approximately three million residential units annually, a tangible measure of their contribution to quality of life and economic activity.

International and Regional Impact

What does this mean for regional energy cooperation and global investment? The participation of KEPCO from South Korea, JERA from Japan, and TAQA from the United Arab Emirates, alongside Saudi champions SEC and ACWA Power, demonstrates the Kingdom’s ability to convene leading international utilities and investors around its energy programme. It also strengthens economic ties with East Asia and the Gulf, reinforcing Saudi Arabia’s position as a hub for energy investment and technology collaboration.

For the wider region, the projects contribute to grid stability and support the integration of increasing shares of renewable energy by providing flexible, high-efficiency gas-fired capacity that can ramp up when solar and wind output fluctuates. This is essential for maintaining reliability as Saudi Arabia adds tens of gigawatts of renewable energy under the National Renewable Energy Program. The projects also set a benchmark for CCUS readiness, positioning the Kingdom as a leader in carbon management technologies that can be exported or replicated across the region.

From a global perspective, the announcement sends a clear signal that Saudi Arabia remains open for business and is executing on its energy transition plans at scale. The involvement of major international utilities underscores the bankability of SPPC’s IPP model and the attractiveness of the Saudi market. It also aligns with the Kingdom’s broader role in global energy security, as it balances its position as a leading oil producer with a growing commitment to cleaner power generation.

Economic and Strategic Significance

Why is the SAR 30 billion investment significant beyond the power sector? The projects are expected to stimulate local supply chains, encourage the manufacturing of gas turbines and related components in Saudi Arabia, and create skilled jobs for Saudi nationals. The localisation requirement is not merely a formality; it is a strategic lever to build industrial capability in line with Vision 2030’s goal of diversifying the economy and increasing non-oil exports.

The use of Class H/J gas turbines in combined cycle configuration represents the latest generation of high-efficiency technology, capable of converting fuel into electricity with greater efficiency and lower emissions per megawatt-hour. This efficiency reduces fuel consumption, freeing up natural gas for other high-value uses such as petrochemicals and hydrogen production. The CCUS readiness ensures that the plants can be retrofitted with carbon capture equipment in the future, aligning with the circular carbon economy framework and the Kingdom’s net-zero ambitions.

Strategically, the projects enhance the resilience of the electricity system, which is vital for powering the Kingdom’s growing industrial base, data centres, and urban development. They also support the objectives of the Saudi Green Initiative by displacing liquid fuels and reducing emissions. By awarding contracts to consortia that combine Saudi and international expertise, SPPC is fostering knowledge transfer and ensuring that the projects benefit from global best practices in project management, operations, and maintenance.

Vision 2030 Alignment

How do these projects connect to Saudi Vision 2030? Vision 2030 aims to build a diversified and sustainable economy, and a reliable, efficient, and clean energy system is a cornerstone of that transformation. The energy mix plan, with its 50/50 renewable and gas target by 2030, is designed to support economic growth while meeting environmental goals. The Rumah and Al-Nairyah IPPs contribute directly to this by adding flexible, high-efficiency capacity that complements renewables and ensures grid reliability.

Moreover, the projects advance the localisation agenda by requiring local content and encouraging the development of a domestic gas turbine manufacturing ecosystem. This supports the creation of high-value jobs and enhances the Kingdom’s industrial base, both central to Vision 2030. The CCUS readiness and alignment with the Saudi Green Initiative demonstrate Saudi Arabia’s commitment to addressing climate change through practical, technology-driven solutions, consistent with the circular carbon economy approach.

In summary, the SPPC announcement is a milestone in Saudi Arabia’s journey toward an optimal energy mix, economic diversification, and environmental stewardship. It reflects the Kingdom’s ability to attract global partners, deploy advanced technologies, and execute large-scale projects that benefit citizens and contribute to a sustainable future. As Saudi Arabia continues to implement Vision 2030, such projects will be instrumental in powering its progress and reinforcing its role as a responsible global energy leader.

20 Questions

Q1. What did SPPC announce on November 7, 2024?

A1. SPPC announced the winning bidders for the Rumah-1, Rumah-2, Al-Nairyah-1, and Al-Nairyah-2 conventional IPP projects, with a total capacity of 7,200 MW, as part of the Kingdom’s energy mix plan.

Q2. What is the total capacity of the four projects?

A2. The four projects have a combined capacity of 7,200 MW, with each plant contributing 1,800 MW. This will help meet future electricity demand and support the energy mix plan.

Q3. Which consortium won the Rumah-1 project?

A3. The consortium comprising Saudi Electricity Company (SEC), ACWA Power, and Korea Electric Power Corporation (KEPCO) won the Rumah-1 project, with SEC as managing and technical member.

Q4. Which consortium won the Rumah-2 project?

A4. The consortium of Abu Dhabi National Energy Company (TAQA), JERA, and Al-Bawani won the Rumah-2 project, with TAQA as managing and technical member and JERA as technical member.

Q5. Which consortium won the Al-Nairyah-1 project?

A5. The consortium of SEC, ACWA Power, and KEPCO won the Al-Nairyah-1 project, with SEC as managing and technical member and the others as consortium members.

Q6. Which consortium won the Al-Nairyah-2 project?

A6. The consortium of TAQA, JERA, and Al-Bawani won the Al-Nairyah-2 project, with TAQA as managing and technical member and JERA as technical member.

Q7. What is the duration of the power purchase agreements?

A7. SPPC will enter into 25-year power purchase agreements with each project company on a build, own, and operate basis, ensuring long-term revenue stability and investment certainty.

Q8. What is the total investment value of the projects?

A8. The total investment is approximately SAR 30 billion, equivalent to about USD 8 billion. This reflects the scale and attractiveness of Saudi Arabia’s power sector to international investors.

Q9. What type of gas turbines will the projects use?

A9. The projects will use the latest Class H/J gas turbines in combined cycle operation, which are the highest efficiency available and enable the utilisation of carbon capture technologies.

Q10. How many residential units will the projects power?

A10. The projects will supply power to approximately three million residential units annually, demonstrating their significant contribution to meeting the Kingdom’s growing electricity demand.

Q11. What is the energy mix target for 2030?

A11. The energy mix plan aims for renewable energy and gas to each contribute 50 percent of electricity production by 2030, diversifying sources and displacing liquid fuels.

Q12. How do the projects align with the Saudi Green Initiative?

A12. They align by supporting the goal of net-zero greenhouse gas emissions through the circular carbon economy approach by 2060 or earlier, and by incorporating carbon capture readiness.

Q13. What is SPPC’s role in the projects?

A13. SPPC is responsible for preparing preliminary studies, tendering and awarding IPP projects, and purchasing electrical energy from IPPs under a license from the Saudi Electricity Regulatory Authority.

Q14. What does BOO basis mean?

A14. BOO stands for build, own, and operate. The winning consortia will finance, construct, own, and operate the plants, selling electricity to SPPC under long-term agreements.

Q15. How will the projects contribute to local content?

A15. The projects will adhere to localisation and local content requirements, supporting Saudi Arabia’s economy through job creation, supply chain development, and technology transfer.

Q16. What is the significance of localising gas turbine manufacturing?

A16. Localising gas turbine manufacturing aims to build domestic industrial capability, create high-value jobs, and reduce reliance on imports, in line with Vision 2030’s diversification goals.

Q17. Which international companies are involved?

A17. International companies include Korea Electric Power Corporation (KEPCO) from South Korea, JERA from Japan, and TAQA from the UAE, alongside Saudi companies SEC, ACWA Power, and Al-Bawani.

Q18. How do these projects support grid reliability?

A18. The high-efficiency gas-fired plants provide flexible, dispatchable capacity that complements intermittent renewable energy, helping maintain grid stability as renewable share increases.

Q19. What is the circular carbon economy approach?

A19. The circular carbon economy is a framework to manage emissions through reducing, reusing, recycling, and removing carbon, supporting Saudi Arabia’s net-zero ambitions.

Q20. How do these projects align with Vision 2030?

A20. They align by supporting economic diversification, local content, job creation, and a sustainable energy mix, all core objectives of Vision 2030 for a prosperous and sustainable future.

Reader Feedback

We value your thoughts. Please share your feedback on this article.

Name *

Message *

Your feedback helps us improve our coverage.