Spanish firm signs Saudi power plant contract

02 November 2015

Contractor will build Duba integrated solar and combined-cycle power plant

  • Initec Energia signs Duba power plant deal in Saudi Arabia
  • Contract covers engineering, procurement and construction of the integrated solar combined-cycle power plant
  • Signing will encourage kingdom’s projects market after reports of budget concerns

Spain’s Initec Energia has signed a contract with the Saudi Electricity Company (SEC) to provide engineering, procurement and construction (EPC) services for the Duba integrated solar combined-cycle (ISCC) power plant in Saudi Arabia.

The Spanish contractor signed the contract with the state utility on 31 October, according to sources within the kingdom’s power sector close to the project. MEED reported in September that Initec was in negotiations with SEC, and was expected to win the construction contract.

While the power project had been under contract negotiation for some time, the signing of the deal will please Saudi Arabia’s utilities sector, which had been worried by recent reports that the Finance Ministry had told government departments not to award any new contract before the end of 2015. The fact that the project will move ahead with the solar element is also positive news for the kingdom’s power sector, with the client having considered dropping the renewable energy element during the bid evaluation period due to the additional cost.

The Duba ISCC will contain:

  • a gas-fired combined cycle capacity of 485MW-550MW, and
  • a solar output of 40-50MW.

SEC received final commercial submissions for the solar component in July, having received bids for the combined-cycle element in June.

As a result of the lowest bid for the solar component on 9 July, Initec emerged as the low bidder for the overall project, having previously submitted the second lowest price for the combined-cycle element. The contractor saw off competition from five other contractors to win the EPC deal.

The client received technical bids for the EPC deal in November 2014. The commercial bid deadline was extended a number of times to allow contractors more time to work on submissions.

SEC had originally planned to develop the Duba 1 ISCC as an independent power project (IPP), but dropped these plans in early 2014 to proceed with tendering the scheme as a standard engineering, procurement and construction (EPC) contract.

SEC tendered the project as a combination of EPC and equipment packages.

In January, SEC awarded the US’ GE the original equipment manufacturer (OEM) contract for the Duba 1 project. GE’s order includes two F-class gas turbines, a steam turbine, generators, heat recovery steam generators, condenser, control system and long-term service agreements.

Speaking to MEED in Dubai on 2 November at an event to showcase GE’s burgeoning digital business, Azeez Mohammed, president and CEO of power generation services - MENA, GE Power and Water, said that the company’s new software and digital analytics software will boost the operational efficiency of the Duba project.

“The [Duba] project will have different solar mechanisms and different gas mechanisms,” said Mohammed. “Before, these control systems would have been operating quite differently, but now the Predix [cloud-based industrial platform] connects different sources and operates as one. This will improve efficiency and operation of plant.”

The Duba project is one of three ISCC schemes that SEC is planning to develop. In September, the two lowest bidders resubmitted prices for the contract to build a 1,050MW ISCC plant in the Waad al-Shamal industrial development to the north of Saudi Arabia.

The proposed ISCC plant will have combined-cycle capacity of 1,000MW and a solar component of 50MW. The plant will use concentrated solar power (CSP) technology, with the client allowing the bidder to select whether to use parabolic trough, power tower or linear fresnel technology.

MEED reported in September that SEC is planning to build a 3,780MW integrated solar and combined-cycle power plant (ISCC) in Taiba in the western Medina region of the kingdom.

The plant will contain a combined-cycle capacity of 3,600MW as well as a 180MW solar component. The plant will be one of the largest generation facilities in the kingdom, and will cost upwards of $3bn to build.

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