The Saudi Power Procurement Company has signed four storage service agreements for battery energy storage system projects totaling 2,000 megawatts of capacity, representing a combined investment of USD 1.16 billion.

Agreements Signed in Presence of Energy Minister

The signing ceremony took place in Riyadh on August 21, 2026, in the presence of Prince Abdulaziz bin Salman bin Abdulaziz, who serves simultaneously as Minister of Energy, Minister of Industry and Mineral Resources, and Chairman of the Board of Managers of the Saudi Power Procurement Company, which is formally designated the Principal Buyer.

The four agreements cover what officials have described as the first group of Battery Energy Storage System, or BESS, projects to be tendered under a build-own-operate model.

Each of the four projects carries a storage capacity of 500 megawatts with a four-hour storage duration, bringing the combined installed capacity across all four sites to 2,000 megawatts.

Four Project Sites Across Three Regions

The first group of BESS projects spans three administrative regions of Saudi Arabia. In the Makkah Region, two projects are included: the Al Muwyah BESS ISP and the Haden BESS ISP.

A third project, the Al Kahafa BESS ISP, is located in the Hail Region. The fourth project, Al Khushaybi BESS ISP, is situated in the Qassim Region. All four installations share an identical technical specification of 500 megawatts with a four-hour storage duration.

Three of the four projects, Al Muwyah, Haden, and Al Kahafa, were awarded to a consortium comprising Saudi Energy, ACWA, and Al Sharif Contracting and Commercial Development Company. The fourth project, Al Khushaybi in Qassim Region, was awarded to a separate consortium made up of ENGIE and Haji Abdullah Alireza and Co. Ltd.

Projects Supervised by the Ministry of Energy

All four projects are supervised by the Ministry of Energy and are structured under the build-own-operate model. The agreements signed by the Principal Buyer are classified as storage service agreements, a category of contract distinct from the power purchase agreements the Principal Buyer also executes with developer consortia for generation projects.

The Principal Buyer is described as carrying responsibility for conducting pre-development studies, tendering power generation and energy storage projects, and executing both categories contractsact with developer groups.

Renewable Energy Integration and the 2030 Target

According to the Saudi Press Agency announcement, the projects are intended to support the integration of renewable energy and energy storage into the Kingdom's electricity system.

Saudi Arabia has set a target of achieving an optimal electricity generation mix of approximately 50 percent renewable energy by 2030, and the battery storage projects are stated as contributing toward that objective in line with growing electricity demand.

Beyond the renewable energy integration goal, the projects are said to serve several additional functions within the broader electricity system. These include enhancing the reliability and efficiency of the electricity network, increasing its operational flexibility, and supporting the security of electricity supply.

The announcement also cited a broader ambition of strengthening Saudi Arabia's global leadership in the energy sector as a stated objective associated with the projects.

Principal Buyer's Role in Saudi Power Procurement

The Saudi Power Procurement Company, operating under the designation of Principal Buyer, occupies the central contracting role in the Kingdom's structured approach to procuring new generation and storage capacity.

The entity is responsible not only for executing agreements once projects are awarded but also for conducting the pre-development work and managing tender processes that precede those awards.

The four BESS storage service agreements represent the first cohort of battery storage contracts to reach the signing stage under this framework, with all four projects proceeding under identical build-own-operate terms.

Powering Ahead: Your Competitive Edge in the Saudi Arabia Energy Sector

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