The Saudi Power Procurement Company has signed four storage service agreements covering about 2 GW / 8 GWh of battery capacity, with combined investment above SAR 4.35 billion. The awards sit on top of more than 16 GWh already contracted directly by the national utility.
The Saudi Power Procurement Company has signed four storage service agreements covering roughly 2,000 megawatts and 8,000 megawatt-hours of grid-scale battery capacity, with combined investment reported at more than SAR 4.35 billion, or about $1.16 billion.
A consortium of Saudi Energy, ACWA Power and Al Sharif Contracting and Commercial Development Company took three of the four projects — Al Muwyah, Haden and Al Kahafa. The fourth, Al Khushaybi, went to a consortium of Engie and Haji Abdullah Alireza & Co.
The contracting structure is worth noting. These are storage service agreements rather than power purchase agreements: the counterparty is paid for making storage capacity available to the system operator, not for selling energy. That distinction reflects what a battery does on a grid — it moves energy in time rather than producing it — and it puts the dispatch decision with the buyer.
Saudi Arabia has been building battery capacity for two years, but until now the procurement has run mainly through the national utility rather than through the principal buyer. In January 2025 the Saudi Electricity Company awarded BYD contracts for five 500 MW / 2,500 MWh systems, a total of 2.5 GW and 12.5 GWh, at sites in Riyadh, Qaisumah, Dawadmi, Al Jouf and Rabigh. In August the same year it contracted a further 1 GW / 4 GWh across the Tabuk-1 and Hail-2 sites, with China's Hithium supplying equipment and taking operations and maintenance, and the Saudi contractor Alfanar Projects building both facilities.
Added together, that is a national battery fleet contracted at a scale few countries outside China and the United States have attempted, and it has been assembled in under three years.
The reason is arithmetic rather than ambition. Saudi Arabia has 12,000 MW of solar photovoltaic capacity financed and heading for commercial operation between the second half of 2027 and the first half of 2028, in the seven-project portfolio developed by ACWA Power with the PIF-owned Badeel and Aramco's SAPCO, and considerably more in procurement behind it. Solar output is concentrated in the middle of the day; demand in the Kingdom is not. Without storage, a large share of that output either has to be curtailed or has to displace thermal generation at exactly the hours when the system least needs it.
The supply chain behind the fleet is largely Chinese on the cells and Saudi on the construction. BYD and Hithium have supplied the utility-procured systems; Alfanar Projects, a Saudi contractor, built the Tabuk and Hail facilities. The new agreements bring ACWA Power and Engie in as owners and operators rather than equipment vendors, which is a different commercial position — they carry availability risk over the life of the contract.
Eight gigawatt-hours will not solve that on its own. Four hours of discharge across 2 GW covers a fraction of the evening ramp on a system whose peak runs into the tens of gigawatts. What the agreements do is establish a contracting template for storage as a procured service, alongside the utility-owned model, which is what a repeatable programme requires.
Contracting storage through the principal buyer also matters institutionally. SPPC is the single offtaker for Saudi generation, and routing storage through the same counterparty as generation means both can be procured against one view of what the system needs and settled under one set of contracts. The utility-owned batteries sit outside that framework.
The projects have been awarded and the agreements signed. Construction, commissioning and the first cycles on the grid are still ahead, and the interval between a storage contract and a working battery has historically been shorter than for generation but is not zero.