Saudi auction secures record-low price for wind energy

A consortium made up of renewable energy developers from France and Saudi Arabia, EDF Renewables and Masdar, successfully won the tender to build the 400MW Dumat Al Jandal wind farm at a record-low price of 2.13 cents per kWh – a project that will be Saudi Arabia’s first wind farm and the largest in the Middle East.

EDF Renewables and Masdar announced last week that they had been awarded the contract to build the 400MW Dumat Al Jandal wind farm by the Renewable Energy Project Development Office (REPDO) at the Saudi Ministry of Energy, Industry and Mineral Resources (MEIM), following a wildly successful call for tenders which was launched in August of 2017.

The bid prices, which were revealed in July of 2018, were well below market expectation. EDF Renewables and Masdar placed the lowest bid at $21.30/MWh, but this was closely matched by French electric utility Engie, which placed a bid of only $23.62/MWh.

Analysts explained at the time that Saudi Arabia’s National Renewable Energy Program (NREP) was largely responsible for both the interest and the below-average prices offered, considering that the country is looking to install 9.5GW of renewable energy capacity by 2023 – including 3.5GW of solar PV and 1.2GW of wind in program’s first phase.

Worth noting, however, is that in just the last few days, Saudi Arabia’s government informed solar news site pv magazine that it was planning to not only tender 2,225MW worth of solar in 2019 alone, but that it had upgraded its long-term solar targets to 20GW by 2023 and introduced a 40GW by 2030 target as well.

The EDF Renewables/Masdar consortium (held 51%/49%) is already on the ground and looking to begin construction work with local businesses in the next few months.

The wind project, which has already signed a 20-year Power Purchase Agreement (PPA) with the Saudi Power Procurement Company, a subsidiary of distribution and generation outfit Saudi Electricity Company (SEC), is set to be located 560 miles north of Riyadh in the Al Jouf region of north-western Saudi Arabia.

“We are delighted to be awarded this first wind project in the country, which is set to be the most powerful wind farm in the Middle East,” said Bruno Bensasson, EDF Group Senior Executive President responsible for Renewable Energies, and Chairman and CEO of EDF Renewables.

“This success reflects the quality of our partnership with Masdar which has enabled us to jointly submit the most competitive bid. Wind power is now representing a renewable and economical solution in the energy mix.

“This new project demonstrates our ambitions in the country and represents another step forward under the EDF Group’s Cap 2030 strategy, which aims to double its renewable energy capacity by 2030 – both in France and worldwide – to 50GW.”

“The Kingdom of Saudi Arabia has set a clear energy strategy to substantially increase the share of renewables in its total energy mix to 10% by 2023,” explained Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar.

“The selection of Masdar and EDF to develop the Kingdom’s first utility-scale wind power plant is a significant achievement. We are proud to leverage our strong track record in renewables to support the Kingdom’s strategy to in-crease the share of clean energy in its energy mix. Masdar and EDF stand ready to devote our expertise to realising this world-class project.”