However, questions are already being raised as to how this new capacity will be assembled and financed.
There are very real fears in the kingdom that Saudi Arabia's rapidly rising population and electricity consumption, combined with its current dependence on oil and gas-fired power stations, could rapidly deplete the country's already dwindling oil reserves. As a result, the kingdom has set out a plan for a future power mix that by 2032 will see less than half of its generating capacity come from hydrocarbons at 60GW, 17.6GW from nuclear, and 54GW from renewables.
The 54GW renewables plan was updated in late February to provide more details to the market. This is ahead of an introductory round to be launched by the King Abdullah Centre for Atomic and Renewable Energy (KA-CARE) later this year, tendering between 500MW and 800MW of capacity.
This introductory round is expected to cover the range of technologies Saudi is looking at for its entire programme, which is largely dominated by solar. Of the 54GW planned for 2032, 41GW is expected from photovoltaic and concentrated solar power, 9GW from wind, 3GW from waste to energy and the remaining 1GW from geothermal sources.
Of the 9GW wind expected to be procured, just under 2GW is due to be tendered over the next three years. Following the introductory round, where perhaps 100-150MW could be expected to be contracted , there will be two tendering rounds launched between now and 2016 that will include 650MW of wind in the first round and 1.05GW in the second round.
Each wind project will be underpinned by a 20-year power purchase agreement (PPA) with the state-owned Sustainable Energy Procurement Company (SEPC).
With many wind developments in the region stalling — countries such as Egypt have ambitious wind plans that were mothballed following the Arab spring uprisings in 2011 — Ernst & Young head of energy and environmental finance Ben Warren told Windpower Monthly that he believed the Saudi renewables programme could act as a kickstart for the wider region.
"There is great promise for renewables in the region, but what we have seen to date, with the great distractions that political unrest has caused, we have yet to see rhetoric turned into firm delivery with a few notable exceptions in North Africa," said Warren.
"I think Saudi will [be a catalyst]. If you look at the Gulf states they are all looking at each other, dancing around handbags waiting to see who goes first. Saudi, if it all gets developed it will certainly be the kickstart the region needs."
Warren's team, experienced in advising on the financing of renewables projects in Europe, is now running workshops for local banks in Saudi Arabia, familiarising them with the risks and structures involved in deals of this nature.
Saudi Arabia has a strong track-record of project financing independent power plants (IPP) via state-guaranteed long term PPAs, and it is likely that the financing of wind projects will follow a similar structure in the first few phases, with a feed-in tariff potentially introduced after rounds one and two.
While local banks will play a key role in project financing, it is unlikely there will be sufficient money available to cover the sheer number of projects that are due to be tendered, meaning there will certainly be a role for international banks and investors, said Warren.
He likened the way the Saudi tendering rounds will operate to South Africa's current renewables procurement programme.
"One of the challenges for South Africa was the huge amount of projects going through at one time, and this creates a liquidity challenge for the local market," said Warren.
"So I wouldn't be surprised to see international institutional capital investing in these Saudi projects through private equity funds."
One banker who has worked on many IPP project financings in the kingdom agreed with Warren, saying that while local banks can help provide Sharia-compliant financing, the sheer volume of capital required in this programme will need international investors and the expertise of commercial banks to structure the deals.
While international finance looks set to play a key role in the Saudi renewables programme, one area where KA-CARE has declared a bias towards local involvement is the production and construction of projects.
In its document published last month, which outlined the proposed competitive procurement process, KA-CARE revealed that the levels of local content and local labour proposed by bidders will play a role in the points awarded to bids in the tendering process. For wind, maximum points will go to bids in the first round where 50% of the project components are produced locally, and 60% in the second round. There is a minimum requirement of 20% local content, although no points will be awarded for this level. Any bids with local content between these two extremes will be awarded on a sliding scale.
Within the overall local content scores, KA-CARE has awarded different scores to different components, with a view to encouraging the production of certain components in Saudi Arabia. For example, blades and towers are awarded a score of 50%, while gearboxes are given a 100% rating and nacelle assembly just 25%. These scores, along with the scores of all other components, would then be averaged out to give the overall local content level.
Despite the recent World Trade Organisation (WTO) ruling against Ontario's local content rules, Warren said he would expect Saudi Arabia to persist with its local content requirements.
"I'd be very surprised if KA-CARE were not aware of the situation in Ontario, in fact I know they are aware," said Warren.
"I guess the question is whether the kingdom gives credence to the WTO, and if so how much? It will certainly be interesting to see how the local content rules are enforced, and even more interesting to see what the outcome of this is in terms of actual local employment."