Abu Dhabi National Energy Company (TAQA), along with JERA Co., Inc., Japan’s largest power generation firm, and Al Bawani Capital, a subsidiary of AlBawani Holding, has announced the signing of two 25-year power purchase agreements (PPAs) with Saudi Power Procurement Company (SPPC). These agreements, structured on a build, own, and operate model, will facilitate the development of two new greenfield combined cycle gas turbine (CCGT) power projects in Saudi Arabia, boasting a total generation capacity exceeding 3.6 gigawatts.
These PPAs follow SPPC’s recent decision to award contracts for the conventional independent power producer (IPP) projects Rumah 2 and Al Nairyah 2, each with a capacity of 1.8 gigawatts, to a consortium that includes TAQA, JERA, and AlBawani.
The Rumah 2 and Al Nairyah 2 IPP projects will implement the latest high-efficiency CCGT turbines and will incorporate carbon capture technologies. These initiatives align with the Kingdom’s energy strategy, which aims to balance electricity generation from renewable sources and gas technology, targeting a 50 percent share from each by 2030.
Supporting Saudi Green Initiative
In addition, these projects support the Saudi Green Initiative, which aspires to achieve net-zero greenhouse gas emissions through a circular carbon economy by 2060 or sooner, contingent on the availability of essential technologies.
Read more: Abu Dhabi’s TAQA reports $1.7 billion net income during first nine months of 2024
Ownership and operational structure
Moreover, the new plants will be developed through dedicated special purpose entities owned by TAQA (49 percent), JERA (31 percent), and AlBawani (20 percent). The operation and maintenance (O&M) of these facilities will be managed by the partners through respective O&M special purpose entities reflecting the same ownership structure.
Low-carbon solutions
Farid Al Awlaqi, CEO of TAQA’s Generation business, indicated that TAQA has set ambitious growth targets to reach 150 gigawatts by 2030, noting that the recent announcement signifies a significant milestone for 2024, as it adds another 3.6 gigawatts of low-carbon gas-fired power capacity in Saudi Arabia. He further mentioned that this brings their total to five greenfield projects currently under development in the Kingdom. Also, he stated that, in addition to securing the PPAs, TAQA will serve as the lead developer, overseeing operations and maintenance for these world-class plants, showcasing their enhanced operational capabilities. He emphasized that the announcement of these two projects reinforces TAQA’s role as a leader in low-carbon power and water solutions, as well as a reliable and sustainable developer, investor, and operator across key markets.
Additionally, Al Awlaqi expressed pride in supporting the Kingdom and SPPC in their energy transition efforts through these crucial power plants, alongside their partners JERA and AlBawani.
Commitment to decarbonization
Steven Winn, chief global strategist at JERA, expressed that the awarding of these two high-efficiency independent power projects, featuring cutting-edge HL class gas turbines, underscores JERA’s dedication to decarbonising thermal power generation. He attributed this important milestone to the outstanding collaboration of all stakeholders, including SPPC and their partners TAQA and AlBawani, along with their contractors.
Advancing energy diversification
Fakher AlShawaf, group CEO of AlBawani Holding, remarked that collaborating with TAQA and JERA on these advanced power plants signifies a transformative achievement for AlBawani, reinforcing their commitment to the Kingdom’s energy diversification goals. He conveyed that this project embodies their pledge to sustainable practices and their support for Vision 2030. He added that through this initiative, they aim to provide an efficient and dependable power solution that will be vital in addressing the Kingdom’s increasing energy demands while also fostering local expertise and creating new economic opportunities. Furthermore, he looked forward to collaborating closely with all stakeholders to realize this vision and contribute lasting value to Saudi Arabia’s energy sector.
