Saudi Arabia has received bids from four consortiums competing to win a contract for the $500 million Dumat Al Jandal project — the Kingdom’s first utility-scale wind farm.
The project is due to be awarded on Dec. 18, according to a government announcement on Monday. It will be backed by a 20-year power purchase agreement with the Saudi Power Procurement Company.
The 400MW wind farm will be built in the northern Al-Jouf region and is part of wider efforts to increase the proportion of renewable energy the country produces to help diversify the economy away from its reliance on oil.
“The Kingdom’s first utility-scale wind project opens a new chapter in our journey toward a diversified energy mix. The development of a wind energy industry in Saudi Arabia is an important component of our wider industrial diversification strategy,” said Khalid Al-Falih, minister of energy, industry and mineral resources.
The tender is the second to be issued by the ministry under the National Renewable Energy Program, a government strategy which sets out specific targets on future renewable energy production.
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The program aims to increase the country’s renewable energy share to 3.45 GW by 2020 — the equivalent of 4 percent of total energy production. By 2023, this proportion is expected to increase to 9.5 GW, the equivalent of 10 percent of total production.
Once complete, the wind farm will be able to generate enough power to supply up to 70,000 Saudi households, the ministry said.
The bids were received from companies already pre-qualified following the issuing of a request for proposal in August last year.
France’s EDF Energies Nouvelles and Abu Dhabi’s Masdar placed the lowest bid of just under eight halalas per kilowatt hour, while the second lowest was submitted by the Dubai branch of France’s Engie and Saudi Services for Electro Mechanic Works.
A halala is equal to one hundredth of a riyal.
A consortium of Saudi Arabia’s ACWA Power and Portugal’s Martifer Renewables placed a bid of slightly over 10 halalas per kilowatt hour, while Italy’s Enel Green Power and local firm Al Babtain Contracting bid just over 12 halalas.
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