ACWA Power, a Saudi Arabia-based firm involved in the development, construction, and operation of power generation and desalination water plants, will develop the 300 MW grid-connected solar photovoltaic (PV) Sakaka project in the Kingdom.

The company bagged the power purchase contract for a period of 25 years at a new world record tariff of 8.781 halalas (~$0.234)/kWh and will invest $302 million to develop the Sakaka solar project, ACWA Power said in a media statement.

Commenting on the development, the chairman of ACWA Power, Mohammad Abdullah Abunayyan said, “We are humbled to be entrusted with the first utility scale renewable energy plant to be developed in the kingdom, which will be the foundation of the visionary ambitious national program that seeks to maximize the utilization of renewable energy sources, as defined by the National Transition Plan 2020 and the objectives of the Saudi Vision 2030.”

The Ministry of Energy, Industry and Mineral Resources Renewable Energy Project Development Office (REPDO) selected ACWA Power as the firm with the most competitive compliant offer amongst the submissions made by a consortium of eight local and international bidders.

With this auction, REPDO has also set an example for others to learn from. REPDO did not choose the bidder quoting the lowest price as the winner of the auction. Mercom previously reported that a total of eight bids ranging from 6.69736 halalas ($0.0178)/kWh to 12.62521 halalas ($0.336)/kWh were received from pre‑qualified companies for the Sakaka project. Abu Dhabi Future Energy Company (Masdar) and EDF Energies Nouvelles had submitted a bid at 6.69 halalas ($0.0178)/kWh. ACWA Power had come in second, with a bid for the levelized cost of energy (LCOE) at 8.78 halalas ($0.0234)/kWh.

The Kingdom of Saudi Arabia launched its first requests for qualifications (RFQs) for the National Renewable Energy Program (NREP) in February 2017. The NREP is targeting installations totaling 9.5 GW of renewable energy by 2023 under the Vision 2030 program. It also has an interim target of 3.45 GW of installed renewable power capacity by 2020 under the kingdom’s National Transformation Program (NTP).

In January 2018, Mercom reported that the Kingdom of Saudi Arabia plans to tender over 3 GW of grid-connected solar photovoltaic (PV) and 800 MW of wind projects to meet its increasing energy demands.