Saudi’s ACWA Power announced the signing of a power purchase agreement with Saudi Power Procurement Company. The agreement, covering two gas projects, is valued at SAR14.6 billion, or about $3.9 billion.
The power purchase is aimed at producing electrical energy using the combined cycle power system in Taiba-1 and Qassim-1 in Saudi Arabia. It aims to increase the production capacity of each station to 1,800 megawatts.
Combined cycle power system
The combined cycle is the process of generating electricity using heat engines. The process involves converting that heat into mechanical energy that is used to generate electricity using generators.
The Saudi company stated that it signed this agreement to develop, finance, build, own, and operate gas projects using the combined cycle system for a period of 25 years.
Moreover, ACWA Power stressed that the agreement’s financial rewards will become evident after the first half of 2027.
During yesterday’s trading, the shares of ACWA Power increased by 0.94 percent or SAR0.20 per share. As a result, the company gained billions of riyals from the announcement of the agreements. Currently, the stock is trading at SAR212.60 per share.
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Environmental impact
The development of these two projects falls under traditional power plants within the Optimum Energy Mix plan. The plan is supervised by the Saudi Ministry of Energy. The projects intend to meet the needs of the electrical system and ensure the reliability of the Saudi power supply. They also aim to localize the manufacturing process of gas units and the use of carbon capture technologies. That is according to what Saudi Electricity Company stated in a previous announcement. It also indicated that the projects align with the Saudi Green Initiative’s (SGI) goals of net zero emissions by 2060.
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