King Abdullah City for Atomic and Renewable Energy (KA-Care) is preparing to invite bids to develop 2,850MW of renewable energy projects. KA-Care will issue a draft request for proposals (RFP) by the third quarter of 2012 and developers will be invited to comment on the programme in June. A final RFP will be issued in the first quarter of 2013.
This will be the first round of renewable energy projects procured by KA-Care. About 1,100MW is to be developed as photovoltaic solar, 900MW as concentrated solar power, 650MW as wind projects and 200MW from other sources, including geothermal and waste-to-energy.
A second round of procurement will be carried out in 2013 and 2014. In this round, KA-Care will target about 1,300MW of photovoltaic solar power capacity, 1,200MW of concentrated solar power, 1,050MW of wind power and 250MW in other renewable energy projects.
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In both rounds, developers will be asked to submit proposals for projects of at least 5MW in capacity and the developers will be responsible for site selection. All of the projects will be developed as independent power projects (IPPs) with 20-year power purchase agreements signed with each of the private power developers.
KA-Care will establish a sustainable energy procurement company (SEPC) to arrange and oversee the procurement process before the RFP is issued. Procurement will take about 6-8 months in both cases. The proposals will be assessed in three phases and will be judged according to a points system, taking into account financial capability, experience, development status, proposed power price and the amount of work that will be carried out locally.
KA-Care plans to agree on a funding mechanism for at least the first round of procurement before the RFP is issued. The National Grid Company will start work on reinforcing the power distribution network immediately in preparation for accepting renewable power into the grid.
Once two rounds of procurement have been completed, KA-Care will consider introducing a universal feed-in tariff for renewable power. KA-Care has said that it will implement a feed-in tariff so long as it believes that base costs for renewable power will not be markedly different over the following two years and the projects in the first two rounds are completed to a satisfactory standard and to schedule. If either condition is not met, KA-Care will carry out a third round of procurement instead of a feed-in tariff.
Once a decision to introduce a feed-in tariff has been made, KA-Care intends to identify acceptable project sizes and technologies within two months. KA-Care will propose feed-in tariff prices in the following month. Once the feed-in tariff has been in place for three years, KA-Care will carry out a review of the tariff. It will then carry out a review every three years after that to allow tariff levels to be adjusted to respond to the market.
Through its procurement and feed-in tariff plans, KA-Care is keen to promote localisation in the value chain. About 78 per cent of Saudi Arabia’s spending on renewable energy to 2030 is intended to benefit local companies. Of this, 56 per cent will be in services and 22 per cent in manufacturing.
The renewable energy procurement plans and proposed feed-in tariff are part of Saudi Arabia’s plans to develop 54.1GW of renewable power by 2030, including 41GW from solar power. About 16GW would use photovoltaic solar technology and 25GW would use concentrated solar power, or 4.4-5.5 per cent and 11.7-17.2 per cent of the country’s electricity mix respectively.
Besides KA-Care’s plans, the Royal Commission for Yanbu has outlined its own plans for renewable energy. It intends to generate 10 per cent of its energy needs from sustainable resources by 2020. About 3 per cent of the target is hoped to be achieved through renewable power projects and the remaining 7 per cent will come from energy efficiency measures.