Saudi Arabia Power Market

Saudi Arabia Power Market Size and Share:

The Saudi Arabia power market size was valued at 81.7 GW in 2024. Looking forward, IMARC Group estimates the market to reach 104.4 GW by 2025-2033, exhibiting a CAGR of 2.76% from 2025-2033. The market is substantial growth trajectory due to government commitment to energy sector modernization and escalating demand for electricity. Moreover, the transition to renewable energy, the focus on energy efficiency, and the development of energy storage solutions are expanding the market.

Energy sector modernization remains another crucial driver of Saudi Arabia's power market. This includes development in renewable energy sources as well as improvement in efficiency and reliability in the existing infrastructures of power. Saudi Arabia has a strong investment in modernizing its electricity grid by integrating smart grid technologies while upgrading its transmission and distribution networks. The government also emphasizes other advanced technologies, such as digital monitoring and automation, to further enhance the performance of the grid with minimal transmission losses. For instance, in 2024, Saudi Arabia signed power purchase agreements for three solar photovoltaic projects; namely Haden, Muwayh, and Al Khushaybi, that will deliver 5,500 MW of renewable energy to the grid by 2027. These projects, valued at SAR 12.3 billion (USD 3.3 billion), aim to achieve 70% of the country's renewable energy goals by 2030. These updates are critical in satisfying the surge demand of electricity and aid in the integration of renewable energy resources into the network. Saudi Arabia hopes to reach a more sustainable, efficient, and resilient power market that supports both its long-run economic goals and environmental commitments with the upgrading of the energy sector.

The population growth as well as ever-increasing needs for electricity serve as two big factors for change in the market of power within the country. Saudi Arabia witnessed rapid growth with an increasingly sprawling urban population having higher demand towards electricity usage - especially for homes and industrial utilization. In particular, there seems to be constant growth as other sectors like those of economy tend to flourish besides industrial operations too. The government is focusing on large-scale infrastructure projects and power plant expansions to meet these increasing needs and ensure energy security for the future of the nation.  For example, in 2024, the Saudi Power Procurement Company signed PPAs for eight projects with a total capacity of 10.9GW, including gas-fired and solar PV plants.

Saudi Arabia Power Market Trends:

Transition to Renewable Energy

Under its Vision 2030 initiative, Saudi Arabia is rapidly moving toward renewable energy, mainly solar and wind power. By 2030, the country plans to generate 50% of its electricity through renewable sources . Numerous mega-scale wind as well as solar ventures have been launched, and investments in renewable energy infrastructure are growing rapidly. For instance, in December 2024, TotalEnergies and Aljomaih Energy signed a 25-year PPA with SPPC for the 300 MW Rabigh 2 solar project under Saudi Arabia's Vision 2030 renewable energy targets. Such projects will reduce the consumption of oil within Saudi Arabia and contribute to global decarbonization efforts.

Focus on Energy Efficiency

One of the main ways that Saudi Arabia will be able to develop renewable energy is by focusing on the increased efficiency of energy usage. Saudi Arabia's increasing demand for electricity has provided an impetus to the management of its growth in a sustainable manner. Several programs and policies have been put into place, including very strict building codes and encouragement for energy-efficient appliances and technologies.  For instance, in 2024, ACWA Power agreed with Uzbekistan's Ministry of Energy on a binding Implementation Agreement that will put in place standalone Battery Energy Storage Systems up to 2GWh capacity.  It fits into the Saudi agenda for sustainability. It means the consumption of energy to be grown hand in hand with prudent usage.

Development of Energy Storage Solutions

With the increased development of renewable sources of energy, particularly intermittent ones like solar and wind power, there is a heightening requirement for effective energy storage solutions. Saudi Arabia is investing in advanced energy storage technologies to achieve better grid stability and manage the variability of renewable energy generation.  For example, as per recent industry reports, by 2024, Saudi Arabia incorporated 4,500 MW of renewable energy in the grid. Its procurement agency released a request for qualifications to undertake the sixth round of solar and wind projects. Excess energy is now stored through advanced battery storage systems or innovative technologies at peak demand during high periods of generation, to be released into the energy infrastructure during times of increased usage. This trend is the key to sure energy supply, and overall the efficiency of a power market increases

Saudi Arabia Power Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Saudi Arabia power market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on generation source.

Analysis by Generation Source:

• Thermal
• Hydro
• Renewable
• Others
   

Thermal power generation is still a major source of electricity in Saudi Arabia, mainly based on natural gas. The kingdom has vast natural gas reserves, and thermal plants provide a stable and reliable source of energy. They are the backbone for base-load demand, ensuring a constant supply of electricity as the country moves toward renewable energy sources in its Vision 2030.

Although Saudi Arabia lacks natural water sources, hydroelectric power is relatively insignificant in the country's energy mix. However, the government is interested in using pumped-storage hydroelectric plants that can help the country store more energy and provide a stable power grid, especially as renewable capacity grows. Hydro is a small contributor but remains an option for future projects among other renewable energies.

Renewable energy is growing very rapidly in Saudi Arabia with the support of solar and wind power. The kingdom has really ambitious plans for Vision 2030 to diversify its energy mix by 2030 and get up to 50 percent from renewable sources. Solar power is perfectly suited to Saudi Arabia's climate as well as to reduce dependence on fossil fuels.

Regional Analysis:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region
   

The Northern and Central regions of Saudi Arabia are crucial to the national power grid, with Riyadh, the capital, serving as a major demand center. This region hosts significant energy infrastructure, including large thermal plants and growing renewable energy projects. It plays a key role in balancing the grid, providing both base-load power and supporting the shift towards renewables.

The Western region, including Jeddah and Mecca, is pivotal for both domestic electricity demand and the country’s economic activities. It hosts a mix of thermal, solar, and desalination plants, contributing to the grid's reliability. As a major economic hub, this region is also central to the development of renewable energy projects, aligning with Saudi Arabia's Vision 2030 sustainability goals.

The Eastern region, home to Saudi Arabia’s major oil and gas fields, contributes significantly to the power market with its thermal plants powered by natural gas. This region also exhibits a crucial role in energy-intensive industries, such as petrochemicals and refining. As a leader in industrial energy use, the Eastern region is essential for the kingdom's economic growth and energy security.

The Southern region, encompassing cities like Abha and Jizan, primarily relies on thermal power plants fueled by natural gas and oil. While its population and industrial demand are lower compared to other regions, it remains vital for ensuring balanced grid distribution across the kingdom. The region is also exploring renewable energy projects, especially solar, to cater to the accelerating demand.

Competitive Landscape:

The competitive landscape of Saudi Arabia's power market is evolving as the government pursues its Vision 2030 goals of energy diversification and sustainability. Key players in the market include state-owned entities such as the Saudi Electricity Company (SEC) and the National Grid SA, which dominate the traditional power generation and transmission sectors. For instance, in 2024, SEC, Acwa Power, and Kepco signed a PPA with SPPC for the 3.6 GW Rumah 1 and Nairyah 1 projects, investing SAR 15 billion ($4 billion) to boost Saudi Arabia’s sustainable energy future. However, the increasing focus on renewable energy has opened the door for private sector participation, with international and local companies actively involved in large-scale solar and wind projects. Additionally, the market is witnessing growing interest in energy storage solutions and advanced grid technologies, fostering a more competitive and dynamic energy landscape.

The report provides a comprehensive analysis of the competitive landscape in the Saudi Arabia power market with detailed profiles of all major companies.

Latest News and Developments:

• In 2024, Saudi Arabia’s Public Investment Fund partnered with second biggest  solar cell manufacturer globally for a $2.8 billion power production plant. This investment aligns with Saudi Arabia’s commitment to diversify its energy mix, aiming to generate 50% of its electricity from renewable sources by 2030 to reduce carbon emissions.
• In 2024, Saudi Arabia’s Ministry of Energy announced 32% progress on automating distribution networks, aiming for 40% by 2025, and plans for nine advanced control centers by 2026.

Saudi Arabia Power Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia power market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia power market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia power industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.