Saudi Arabia invites companies to bid for colossal renewables contracts
Government publishes white paper detailing plans to install 54GW of clean energy capacity by 2032
By Jessica Shankleman 22 Feb 2013
Green businesses have welcomed the official launch of Saudi Arabia's massive renewable energy procurement programme, which could see 54GW of new capacity added to the grid by 2032.
The government-backed K.A. CARE (King Abdullah City for Atomic and Renewable Energy) yesterday unveiled a white paper detailing the tender processes for new solar PV and solar thermal power plants, wind farms, geothermal facilities and waste-to-energy plants.
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The first three rounds of contracts are now expected to be awarded before 2015, with a view to creating more than 7GW of new capacity, the majority of which will come from solar power.
A smaller introductory round will be launched in the first half of this year solely focusing on concentrated solar power. It will be followed by two larger tendering rounds over the period to 2015 for a range of technologies.
Germany clean tech consulting firm Apricum told BusinessGreen the three tender rounds for solar alone could account for more than $10bn (£6.5bn) of investment.
The rounds form part of Saudi Arabia's colossal program to procure 54GW of new renewable energy capacity by 2032, which would see the oil-rich kingdom become one of the largest green energy generators in the world.
According to K.A. CARE, Saudi will continue to source the majority of its power from hydrocarbons, with a further 17.6GW of nuclear energy, but it will also establish itself as a leading renewables hub.
Under the new plans, the vast majority of new green capacity will be solar – 16GW of which come from photovoltaic cells and 35GW from concentrated solar thermal. A further 9GW will come from wind power, 3GW will be provided by waste-to-energy, and 1GW will come from geothermal power.
Developers will be invited to bid for power purchase contracts and the government's Sustainable Energy Procurement Company (SEPC) will buy the electricity generated.
K.A. CARE maintained this mix will allow nuclear, geothermal and waste-to-energy to provide a baseload night-time supply of power, while solar with storage will contribute to the daytime demand alongside gas and oil.
Speaking to BusinessGreen, Matthias Kittler, project manager for Apricum, predicted the programme would offer a massive boost to green industries.
Bidders will be invited from around the world. However, the tendering process will also aim to encourage the creation of local production and jobs. He said the first rounds will offer a bonus to bidders with local sourcing arrangements while rounds after 2015 will include a mandate for local content.
Kittler forecast significant interest from local energy companies seeking to expand into renewables, as well as international firms.
"We also expect a lot of top-notch solar players, such as Suntech Power, will be eager to provide their panels," he added. "[But] we think that for international companies to be successful bidders, they need to find Saudi project partners."
The Emirates Solar Industry Association (ESI) hailed the news as a major milestone for Saudi Arabia and the Middle East solar market as a whole.
"ESIA will continue to work closely with K.A. CARE to make sure this program becomes a resounding success and a benchmark for excellence." said ESI president Vahid Fotuhi.