TAQA to develop two new power plants in Saudi Arabia

Abu Dhabi National Energy Company (TAQA) together with JERA Co., Inc, Japan's largest power generation company and Al Bawani Capital, a subsidiary of AlBawani Holding, announced that they have entered into two 25-year power purchase agreements (PPAs) with Saudi Power Procurement Company (SPPC) on a build, own and operate basis, to develop two new greenfield combined cycle gas turbine (CCGT) power projects with a total power generation capacity of over 3.6 GW in Saudi Arabia.

The PPAs follow SPPC's announcement to award contracts for the 1.8 GW Rumah 2 and 1.8 GW Al Nairyah 2 conventional independent power producer (IPP) projects to a consortium comprising TAQA, JERA and AlBawani.

The Rumah 2 IPP and Al Nairyah 2 IPP will use the highest efficiency CCGT turbines available and enable the utilisation of carbon capture technologies. The projects support the Kingdom's energy mix ambitions, which aim to meet power demand through an optimal energy mix for electricity production of 50% from renewable energy and 50% from gas technology by 2030.

The plants are also in alignment with the Saudi Green Initiative, which aims to achieve net-zero greenhouse gas emissions through the circular carbon economy by 2060 or earlier, depending on the availability of necessary technologies.

The two new plants will be developed by respective special purpose entities owned by TAQA (49%), JERA (31%) and AlBawani (20%), with operation and maintenance ("O&M") of the plants to be undertaken by the partners through respective O&M special purpose entities with the same shareholding structure.

Farid Al Awlaqi, Chief Executive Officer of TAQA's Generation business, said, "TAQA has ambitious growth targets of 150GW by 2030, and today's announcement marks a major milestone for 2024 with the addition of a further 3.6 GW of low-carbon gas-fired power capacity in the Kingdom of Saudi Arabia, making it five greenfield projects in the Kingdom under development in TAQA's portfolio.

In addition to signing the PPAs, we are taking on the role as the lead developer and will oversee the operations and maintenance of these two world-class plants, demonstrating our expanded operational capabilities. Today's announcement of these two greenfield power projects cements TAQA's position as a low-carbon power and water champion and as a trusted and sustainable developer, investor and operator in several key markets. Alongside our partners, JERA and AlBawani, TAQA is pleased to be supporting the Kingdom and SPPC on its energy transition journey with these two pivotal power plants."

Steven Winn, Chief Global Strategist, JERA, said, "In line with JERA's goal to achieve net zero by 2050, the award of these two high-efficiency independent power projects, featuring state-of-the-art HL class gas turbines, reinforces JERA's commitment to decarbonising thermal power generation. This key milestone was successfully achieved thanks to the excellent teamwork of all stakeholders, SPPC and our partners, TAQA and AlBawani, including our contractors in reaching this critical milestone."

Fakher AlShawaf, Group CEO of AlBawani Holding, emphasised, "The partnership with TAQA and JERA on these state-of-the-art power plants marks a transformative milestone for AlBawani, reinforcing our commitment to advancing the Kingdom's energy diversification initiatives. This project represents our dedication to sustainable practices and our commitment to advancing the goals of Vision 2030.

Through this project, we aim to deliver a highly efficient and reliable power solution that will play a crucial role in meeting the Kingdom's growing demand for energy, while also advancing local expertise and creating new opportunities for economic growth. We look forward to working closely with all stakeholders to realise this vision and bring lasting value to Saudi Arabia's energy landscape."