Market review
Our home market
The Kingdom is a hub of green energy innovation that will define net zero possibilities for the region and the world and as the largest exporter of low‑carbon expertise, it is taking its model beyond borders.
The Kingdom is undertaking one of the world’s most ambitious decarbonisation programmes, has a commitment to reach 50/50 renewable energy and a highly‑efficient combined cycle in its electricity mix by 2030, and has a target to reducing its carbon emissions to net zero by 2060. ACWA Power is very closely aligned with the Kingdom’s plan and has its own target to achieve net zero as a company by 2050. With our expertise in deploying renewables at pace and scale and as a national champion, we are poised to lead The Kingdom’s energy transition objectives.
Currently, ACWA Power’s home market portfolio consists of 26 assets, valued at a total investment cost of SAR 190 billion, and constitutes over half of our overall portfolio. By 2030, the Kingdom is planned to remain our largest market within our portfolio at a similar level.
Through a strategic framework agreement with PIF, ACWA Power is responsible to deliver 70% of Saudi Arabia’s renewable installation by 2030 – PIF renewable programme. By the end of 2023, 13.6 GW of the PIF renewable programme has been identified vs. 11.8 GW targeted by the end of 2024. Currently, 1.5 GW are in operations and the 6.6GW under construction is expected to be completed by the last quarter of 2025.
Recently, The Kingdom’s Ministry of Energy (MOE) announced its accelerated target to deploy 20 GW of renewable power every year till 2030See more on the website.. ACWA Power stands ready with the capability to fulfil this accelerated target.
There will be additional competitive bidding space in thermal projects and water desalination. The Kingdom has made its intentions clear to deploy natural gas as a transitional energy source, evidenced by the MOE’s recent announcement to add 15 GW within the next two years. In 2023, ACWA Power signed the PPA for two natural gas combined cycle power plants in the Madina and Qassim region, with a total production capacity of 3.8 GW.
The MOE has also stated that the Kingdom aims to be a major exporter of green hydrogen globally and is developing international partnerships to develop more green hydrogen projects in the country, in addition to hydrogen mobility solutions, including trains. ACWA Power is already a first mover with the Neom Green Hydrogen Project in partnership with Neom and Air Products.
Central Asia
The countries of Central Asia, epitomised in our business by Uzbekistan, share a unified vision with the Kingdom in their dedication and urgency to decarbonise their economies through energy mix diversification. This shared objective has not only fostered strong government‑to‑government relations with the Kingdom but has also positioned ACWA Power as a preferred partner, thanks to our proven track record as a leader in energy transition.
Uzbekistan is currently ACWA Power’s second‑largest market outside the Kingdom in terms projects by total investment cost, underscoring the company’s commitment to the country with a portfolio including 14 projects, 13 of which are fully renewable. We recently broke ground on a 3,000 tonne/year green hydrogen project which will serve as a pilot project for a 500,000 tonne green ammonia project which aims to reduce 1.5 million tonnes of CO2 annually. Our portfolio in Uzbekistan was developed over the past four years, demonstrating commitment and speed of execution, and backed by a strong government and bilateral ties.
ACWA Power is currently constructing a 240 MW wind power plant in Azerbaijan, and has very recently singed a MoU with the State Oil Company of Azerbaijan Republic (SOCAR) and Abu Dhabi Future Energy Company (Masdar), to develop 500 MW of renewable energy projects in the Nakhchivan Autonomous Republic of the Republic of Azerbaijan, forging a strong partnership for future development in the country. Earlier in the year, four implementation agreements for the development of mega projects including a 1 GW onshore, a 1.5 GW offshore wind farm and a battery energy storage project were signed with the Azerbaijan Ministry of Energy.
In early 2023, ACWA Power made an entry into Kazakhstan through a partnership agreement with Republic of Kazakhstan’s Ministry of Energy and Samruk‑Kazyna, the sovereign wealth fund of Kazakhstan, to lead and develop a 1 GW wind energy and battery storage project within the Central Asian country. Sustainability is a key priority in Kazakhstan’s 2050 strategy and the focus is to meet 50% of its energy requirements via alternative and green energy technologies by 2050.
China
In its efforts to achieve carbon neutrality by 2060, the speed and scale of expansion in China’s installed renewable capacity is unmatched. According to the International Energy Agency (IEA), in 2023, China commissioned as much solar PV as the entire world did in 2022, while its wind additions also grew by 66% year‑on‑year. Due to the gigantic market potential and incentive policies for foreign‑funded enterprises, both central government and local governments are actively seeking foreign investment and FDI supported by State‑Owned Enterprises (SOEs), presenting a strategic opportunity for the next years.
ACWA Power has enjoyed a long‑standing relationship with Chinese firms, collaborating on pivotal projects both within the Kingdom and in other markets. ACWA Power’s association with China began in 2009 with the establishment of the Beijing office. Since then, Chinese investors and financiers have contributed a total of USD 10 billion to ACWA Power’s global project portfolio, while Chinese EPC contractors, material suppliers, and financiers have participated in 47 projects and signed contracts worth more than USD 30 billion, covering landmark renewable, green hydrogen and seawater desalination projects worldwide.
The Chinese market is pivotal to the success of our growth ambition. Our relationships have been deep at both a G2G and B2B level, therefore de‑risking our ability to enter the market and making it one of our biggest priorities. The scale of China supports our ambition to triple our size with a focused approach. We intend to begin on a small scale in China, with our existing partners, acquire expertise in the early years, and then ramp up our efforts to grow further.
The opportunities in China are not only limited to renewable projects, given that there are also opportunities in water desalination, where we have proven expertise. In addition, there is also a big opportunity for green hydrogen in China for the long term in terms of the local demand, as well as the green molecules export to neighbouring countries.
Our strategy includes a thorough initial assessment, identifying the most promising projects, primarily in collaboration with existing partners.
In addition to project development, ACWA Power is committed to continuous learning and adaptation by engaging with Chinese technological advancements and innovation ecosystems. This approach ensures that we remain at the forefront of the energy sector, maintaining our competitive edge in the rapidly evolving global market.