In a significant move toward sustainable energy, Saudi Arabia is gearing up to unveil a groundbreaking solar project boasting a world-record low tariff. The revelation comes from Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, who made the announcement during a virtual conference organized by the kingdom’s Future Investment Initiative Institute (FII-I).

Advancing Solar Innovation

Prince Abdulaziz expressed confidence that the upcoming solar project would set a new benchmark for the lowest cost per kilowatt of electricity. This landmark initiative is expected to be none other than the 600MW Fasiliyah photovoltaic (PV) solar independent power producer (IPP) project. This project stands out as the largest undertaking planned under the second round of Saudi Arabia’s ambitious National Renewable Energy Programme (NREP).

Unveiling the Best and Final Proposals

The Renewable Energy Project Development Office (Repdo), a subsidiary of the Energy Ministry, received the best and final offers (BAFO) from two shortlisted bidders for the Fasiliyah PV IPP in April. The contenders, Acwa Power (local) in collaboration with GIC (Kuwait) and Al-Babtain, and Masdar (UAE), EDF (France), and Nesma Holding (local), are vying for the opportunity to contribute to this groundbreaking project.

Narrow Margins Spur Additional Evaluation

Notably, the levelized cost of electricity (LCOE) tariffs from the two lowest bidders for the 600MW Fasiliyah PV IPP were so closely contested that the client opted to invite both groups to submit a BAFO. This strategic move reflects the significance of ensuring the best possible outcome for such a transformative project.

Preferred Bidders and Project Outlook

Energy & Utilities reported in April that Repdo had already opened the commercial prices and selected preferred bidders for five of the six PV solar projects under the second round of the NREP. The successful bidders for the Fasiliyah PV IPP are poised to enter into a 25-year power purchase agreement (PPA) with the offtaker Saudi Procurement Company (SPPC).

Surpassing Records: A Glimpse into the Future

Anticipation surrounds the Fasiliyah IPP, with expectations that it will surpass the current record for a utility-scale PV IPP set in Abu Dhabi earlier this year. This comes as part of a broader trend in the region, with Energy & Utilities reporting that a consortium led by France’s EDF and China’s Jinko Power recently submitted the lowest tariff for the planned 2GW Al-Dhafra photovoltaic (PV) solar project. The global shift toward sustainable energy solutions continues, with Saudi Arabia leading the charge in redefining solar power economics.