State utility Saudi Electricity Company (SEC) is planning to tender and procure the planned PP15 power generation plant as an independent power project (IPP).

According to sources in the kingdom’s power and project finance sectors, SEC is planning to develop the project as an IPP, although a final decision has yet to be reached.

According to information released by SEC in its 2014-24 generation programme, the 5,400MW PP15 plant would be the kingdom’s largest power generation facility when completed. Under the 2024 generation plan, 1,800MW of capacity for the PP15 facility would come online every year from 2020-22.

When released in 2014, SEC’s 2024 generation programme was expected to be largely delivered using engineering, procurement and construction (EPC) contracts, which it had favoured for the majority of its major new power plant schemes since 2012.

However, with oil prices continuing to decline significantly into 2016, SEC is now planning to use the IPP and contractor financing models to procure its future schemes.

With domestic demand for electricity expected to grow at a rate of about 7 per cent a year until 2032, SEC is facing a significant challenge to expand the kingdom’s generation capacity in this period.

The last contract that SEC awarded for a major power plant under its 2024 development programme was the estimated $1bn deal awarded to the US’ GE to build the 1,390MW integrated solar and combined-cycle (ISCC) plant in the Waad al-Shamal industrial development.

According to sources close to the project, the contract was signed on 30 December. Of the total capacity of about 1,390MW, 50MW will come from a concentrated solar power (CSP) component. The majority of the capacity will be generated from gas-fired turbines.