Saudi Arabia’s decision to remove the lowest bidder from the running to develop its first major solar project shows that Riyadh is determined to get its renewables programme right this time.

The lowest bid of 1.78 $cents a kilowatt hour ($c/KWh) grabbed headlines around the world – not only was it a world record low tariff for photovoltaic (PV) solar generation on a utility scale, but it had smashed the $2c/KWh barrier, which could not have been envisaged even a couple of years ago.

While no official reason was given for the removal of the low bidder, a consortium led by UAE’s Masdar, according to sources close to the programme the lowest bid was non-compliant on a handful of technical aspects. The decision to not include the bid in the final negotiations was a brave one, and has set an important precedent for the rest of the kingdom’s renewables programme: only the best comprehensive submissions will succeed.

The region’s projects market has long been derided in some quarters for always awarding projects to the lowest bidder, and has on occasion resulted in the selected firm having to raise the budget mid-way through the scheme or even led to termination of the contract. The decision by the kingdom’s Renewable Energy Project Development Office (Repdo) to buck this trend should be welcomed, and paves the way for the sustainable and successful execution of its ambitious renewable energy plans.

While the exclusion of the lowest bid for final negotiations has gained much publicity, it should not be forgotten that the second lowest bid was also lower than any tariff for large-scale PV solar generation. With the two remaining bidders, Saudi Arabia’s Acwa Power and Japan’s Marubeni, both having been awarded major solar projects in Dubai and Abu Dhabi respectively for previous world record tariffs, Riyadh can be confident that whoever is appointed will deliver the project successfully.

While much attention will be paid to who is chosen to deliver Saudi Arabia’s first major renewables project, attention will soon move to the next projects of the kingdom’s sizeable 9.5GW National Renewable Energy Programme (NREP), which is set to offer some of the most lucrative opportunities in the region’s rapidly emerging clean energy market.