Saudi Arabia is taking a significant step towards diversifying its energy portfolio by launching a tender for Battery Energy Storage Systems (BESS), with a total capacity of 2,000 MW. These systems will store up to 8,000 MWh of energy, enhancing the management of renewable sources like solar and wind within the national grid.
The Saudi Power Procurement Company (SPPC) is spearheading this initiative, which includes four projects under the build-own-operate (BOO) model. This model allows selected companies to fully own and operate the energy storage facilities. The projects are distributed across various regions: Al-Muwyah and Haden in Makkah, Al-Khushaybi in Al-Qassim, and Al-Kahafa in Hail, each with a capacity of 500 MW.
The BOO Model Explained
The BOO model grants companies the autonomy to design, finance, build, and operate the energy storage systems, ensuring private sector involvement in the energy market. Those selected will enter into a 15-year storage service agreement with SPPC, providing investment security and a stable energy supply for the nation.
Advancing Saudi Arabia’s Energy Objectives
These storage systems are pivotal in achieving Saudi Arabia’s energy targets, which include increasing renewable energy to 50% of its electricity mix by 2030. By smoothing fluctuations from intermittent sources like solar and wind, these systems enhance grid stability and reduce fossil fuel dependency.
Renewable Energy Sector Developments
The storage tender aligns with Saudi Arabia’s robust renewable energy momentum. Earlier, SPPC announced a 4.5 GW renewable energy tender, and several companies are progressing to the next competition stage, which includes 3.7 GW of solar projects. ACWA Power has secured financing for 5.5 GW of solar projects, highlighting the private sector’s commitment to energy transition.
These storage systems are crucial for ongoing solar projects, allowing energy conservation during high demand and boosting grid efficiency. By integrating storage capacities, Saudi Arabia is poised to manage supply variations and bolster energy infrastructure resilience.
Outlook for Saudi Arabia’s Energy Sector
These strategic moves underscore a shift towards a sustainable energy future, aimed at reducing oil dependence and diversifying the economy. The development of storage facilities, alongside renewable investments, positions Saudi Arabia as a significant player in the regional and global energy sectors.
