Saudi Arabia Power EPC Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Saudi Arabia Power EPC Market Trends and Insights

Vision 2030 Capacity-Addition Roadmap

Saudi Arabia raised its renewable target to 100–130 gigawatts by 2030, a leap that requires more than 20 gigawatts of fresh capacity each year—a rate triple the cumulative 6.55 gigawatts installed before 2025. The Public Investment Fund–backed ACWA Power secured seven PPAs in July 2025 totaling 15 gigawatts, proving that sovereign balance sheets can absorb large awards without auction delays. Record solar bids of USD 0.0129 per kilowatt-hour at the 2-gigawatt Al-Sadawi plant illustrate continuing cost deflation. Yet with only 14.4 gigawatts tendered to date, policymakers must contract at least 70 gigawatts in five years to meet the low end of the target range, underscoring the urgency for streamlined permitting.

National Renewable Energy Program Pipeline

Round 5 of the National Renewable Energy Program pre-qualified 33 bidders for a 2-gigawatt battery-storage tender, bundling storage and solar into one EPC scope that favors integrated suppliers.^{[2]International Monetary Fund, “Saudi Arabia: 2024 Article IV Consultation,” imf.org} PowerChina alone won 1.75 gigawatts of solar EPC in January 2025, while China Energy Engineering Corporation secured the 2-gigawatt Haden plant for USD 976 million in 2024, confirming Chinese dominance in price-competitive utility-scale projects.^{[3]ACWA Power, “Al-Sadawi Solar Bid,” acwapower.com} The phased auction schedule mitigates execution risk, but parallel construction of multiple sites strains welders, electricians, and logistically critical crane operators.

Rapid Industrial-Sector Electricity Demand Growth

Mining, petrochemicals, and gas-processing expansions in Jubail, Ras Al Khair, and Yanbu push industrial loads beyond household demand. Ma’aden’s capital plan allocates up to SAR 9.55 billion (USD 2.55 billion) for growth projects in 2025, much of it for captive substations. Saudi Aramco’s Al Jafurah field adds compressor stations that require multi-megawatt onsite generation. These industrial clusters gravitate toward projects above 500 megawatts for scale economies while remote sites adopt sub-100 megawatt microgrids.

Grid-Modernisation & Inter-Connection Investments

The Saudi Electricity Company’s smart-grid roadmap rolls out automated substations, advanced meters, and high-voltage direct-current (HVDC) backbones. Hyundai E&C is building a 1,089-kilometer, 4,000-megawatt HVDC link between Kudmi and Riyadh for USD 725 million. Hitachi Energy began commissioning the 3-gigawatt Saudi–Egypt interconnector in January 2026, a precursor to an Arab Mashreq grid. Regionally, the GCC Interconnection Authority committed USD 3.5 billion to new links, further lifting transmission EPC demand.

Local-Content Mandates for EPC Contractors

The IKTVA program requires minimum Saudi value add, pushing foreign firms to localize production. Siemens Energy produced its first H-class turbine in Dammam in March 2025, and GE Vernova completed the kingdom’s first Saudi-led turbine overhaul the same month. Upcoming ABB–NIDC academies promise to ease skill gaps, yet contractors still scramble for certified welders and electricians, inflating wage bills.

Green-Hydrogen Mega-Projects Driving New Power Build-Outs

NEOM’s USD 8.4 billion hydrogen complex, 80% complete in 2025, needs 4 gigawatts of dedicated renewables to start 600 tonnes-per-day hydrogen output in 2026. Air Products’ USD 6.7 billion EPC scope bundles generation, substations, and processing units, foreshadowing more integrated packages as Saudi Arabia targets a 44 million-tonne carbon-capture hub by 2035.

Lengthy Permitting & Approval Cycles

Environmental assessments, land leases, and interconnection sign-offs can stretch 12–18 months. The 2025 Investment Law promises streamlined dispute resolution, but developers have yet to record faster approvals. While the Etimad e-procurement portal pays 83% of invoices within 15 days, licensing delays continue to slow multi-gigawatt auctions.

Shortage of Specialised EPC Labor & Skills

Sixty percent of global energy firms report hiring trouble, with electricians and welders hardest to source. Saudization targets set 75% local employment in energy, but rapid project scaling still forces contractors to import skilled workers from South Asia, risking compliance penalties. ABB’s 2026 training academy will help, but labor tightness could linger through 2027.

Segment Analysis

By Technology: Renewable Tenders Monopolize Competitive EPC

Renewables took 100% of new capacity awards in 2025, and the segment is forecast to rise at a 4.8% CAGR to 2031. This dominance stems from policy that channels Saudi Power Procurement Company auctions solely to solar and wind while thermal plants proceed under direct awards. ACWA Power alone commissioned 2.79 gigawatts of solar in 2025 across Al Kahfah, Ar Rass 2, and Saad 2. Although excluded from competitive tenders, combined-cycle gas turbine builds such as the 3.6-gigawatt Rumah 2 project ensure reserve margin stability. Siemens Energy booked USD 1.6 billion of orders for Rumah 2 and Nairiyah 2 in March 2025, bolstering the Saudi Arabia power EPC industry’s thermal backlog.^{[4]Saudi Electricity Company, “Corporate Information,” se.com.sa}

Second-order effects include rising demand for grid-connected batteries, with Round 5 bundling 2 gigawatts of storage across four sites. Competitive tariffs below USD 0.013 per kilowatt-hour indicate that integrated solar-plus-storage EPC achieves economies non-integrated vendors cannot match. If execution stays on schedule, renewables will continue to shape 60–65% of the Saudi Arabia power EPC market size over the forecast period.

Note: Segment shares of all individual segments available upon report purchase

By Capacity Band: Utility-Scale Dominates, Yet Microgrids Surge

Projects above 500 megawatts captured 61.5% of 2025 EPC spending, led by ACWA Power’s 1.425-gigawatt Al Kahfah solar farm. High capacity factors and centralized procurement cut levelized costs, favoring mega-scale plants. The 100–499 megawatt bracket serves regional utilities and industrial clusters, often integrating 250-megawatt storage blocks.

The up-to-100 megawatt segment, though smaller in absolute value, is the fastest-growing at 6.1% through 2031. NEOM’s hydrogen facility uses modular sub-100 megawatt arrays aligned with electrolyzer ramps. The Red Sea Development Company operates a 400-megawatt microgrid with 1.3 gigawatt-hours of batteries, proving distributed resources can power isolated assets. These projects confirm that microgrids will steadily enlarge their Saudi Arabia power EPC market share.

By End-User: IPPs Outpace Utilities as Liberalization Accelerates

Regulated utilities controlled 56.8% of 2025 spending, yet independent power producers (IPPs) are forecast to expand 5.7% annually to 2031. ACWA Power’s SAR 31 billion worth of PPAs in 2025 illustrate the IPP growth path, while Korea Electric Power Corporation’s joint ventures in combined-cycle gas projects show foreign utilities favor equity stakes over equipment sales. Industrial captive power also rises as Ma’aden invests SAR 7.55–9.55 billion in generation to secure tariff certainty.

Power Transmission and Distribution EPC: Smart Grids and Cross-Border Links

Transmission and distribution EPC represented USD 6.48 billion in 2025 and is poised to reach USD 8.49 billion in 2031. Hyundai E&C’s Kudmi–Riyadh HVDC line and Hitachi Energy’s Saudi–Egypt link exemplify the shift toward long-distance, high-capacity corridors. Regionally, the GCC Interconnection Authority’s USD 3.5 billion plan fosters a meshed Gulf grid. On the distribution side, Saudi Electricity Company aims for nationwide smart-meter coverage by 2028 to unlock demand-response tariffs.

Geography Analysis

Northern Border and Tabuk lead the renewable build-out thanks to the kingdom’s best solar irradiance and steady wind patterns. ACWA Power’s 1.425-gigawatt Al Kahfah project and the 400-megawatt Dumat Al Jandal wind farm deliver capacity factors 15–20% above national averages, entrenching the region as a cost-leader. Hyundai E&C’s 4,000-megawatt Kudmi–Riyadh HVDC line unlocks an added 10–15 gigawatts of stranded northern potential.

The Eastern Province anchors heavy-industry demand. Jubail, Ras Al Khair, and Dammam absorb over 30% of national electricity, spurring large gas-fired builds and captive substations. Siemens Energy’s Dammam plant rolled out the first Saudi-built H-class turbine in 2025, while the Saudi–Egypt interconnector terminates near Dammam, positioning the area as a future export hub.

NEOM and the Red Sea coast form an emerging green-hydrogen and tourism corridor. NEOM’s 4 gigawatts of captive renewables and the Red Sea Development Company’s 400-megawatt microgrid rely on distributed architectures suited to phased developments. Although eventual GCC links will integrate these coastal loads, present EPC work focuses on islanded systems that can be expanded module by module.