Saudi Arabia signs 2 GW of battery storage deals in its first BESS tender

The Saudi Power Procurement Company signed storage service agreements for four grid battery plants totaling 2,000 MW of four-hour storage, or 8,000 MWh, at a ceremony at the Ministry of Energy in Riyadh on August 20, 2026. According to the Saudi Press Agency statement, the four projects represent total investment of more than SAR 4.35 billion (approximately USD 1.16 billion) and form the first group of battery storage projects procured under the Kingdom's build-own-operate model.

Three of the plants went to a consortium of Saudi Energy, ACWA Power, and Al Sharif Contracting and Commercial Development Company: Al Muwayh and Haden in Makkah Region, and Al Kahafa in Hail Region. The fourth, Al Khushaybi in Qassim Region, went to a consortium of the French utility Engie and Haji Abdullah Alireza & Co. Each plant is rated at 500 MW with 2,000 MWh of storage capacity.

Storage priced as a service

SPPC, the Principal Buyer established under the Ministry of Energy, runs pre-development studies, tenders generation and storage projects, and signs power purchase and storage service agreements with developer consortia, per the SPA statement. The structure treats stored energy the way the Kingdom already treats generation capacity: a state counterparty contracts for it long-term, and developers finance, build, own, and operate the asset. ACWA Power's release describes pricing storage as a service in its own right as a route to market Saudi Arabia can repeat for later tranches. ACWA says its three plants will supply under 15-year agreements, and calls the award "one of the largest BESS procurements globally."

"These plants will hold energy generated through the day and release it when demand reaches its peak," said Omar Al Hassan, ACWA's CEO for Saudi Arabia, in the release.

The SPA statement frames the projects as support for integrating renewables into the Kingdom's electricity system and for reaching an optimal generation mix of approximately 50% renewable energy by 2030.

Two years from prequalification to signature

The tender behind the signing dates to late 2024. Energy-storage.news reported in January 2025 that 33 companies prequalified for the four projects, among them Masdar, EDF, and TotalEnergies, alongside battery and renewables players from China, South Korea, and Japan. The same report put the Kingdom's aim at around 48 GWh of deployed battery storage by the end of the decade.

The interest made sense: a single award covering 8,000 MWh is large by any market's standard. For comparison, US operators added 8.3 GW across the entire country in the first half of 2026 (US grid batteries near 52 GW). Saudi Arabia's opening tranche books a quarter of that in one ceremony, though building it will take years rather than months.

Outlook

A second group of six projects totaling 3,000 MW was issued in June 2026, with qualified applicants already listed, according to Zawya's account of the signing. If SPPC awards that group under the same storage service structure, the program's first two tranches alone would put 5 GW, or 20 GWh at four-hour duration, under long-term contracts, a large share of the roughly 48 GWh by 2030 aim energy-storage.news reported. The pace so far, prequalification in late 2024 to signatures in August 2026, suggests the second group could run on a similar two-year clock, which would land its awards well before the 2030 target date.