As night falls, Saudi Arabia's electricity demand peaks due to the combined effects of household air conditioning, commercial lighting, and continuously operating industrial equipment. At this time, the solar photovoltaic panels scattered across the desert have long ceased to operate.

The large battery storage systems, known as "power banks," provide stable support for the power grid—they charge during the midday when the sunlight is strongest and electricity is cheapest or even surplus, and discharge at night when electricity is most expensive and scarce.

In the past, Saudi Arabia's power system, like many traditional power grids, was a "real-time balance system" that operated on an "as generated, as used" basis, where electricity generation had to closely follow the consumption curve. In this model, the value of electricity was almost entirely equivalent to the fuel cost at the time of production, lacking flexibility in the time dimension.

Just like banks absorb idle funds and lend them out when needed, the "electricity bank" absorbs the excess green electricity generated during peak solar hours. This electricity is very low-cost and sometimes even wasted due to the inability to consume it.

During peak electricity consumption periods when electricity prices are high, the stored power is released, realizing its value multiple times. This "buy low, sell high" arbitrage model creates direct and clear cash flow for energy storage asset owners.

The phased goals set by the Saudi Ministry of Energy are paving the way for this value revolution: to achieve 8 gigawatt-hours of energy storage capacity by 2025, increase it to 22 gigawatt-hours by 2026, and ultimately reach 48 gigawatt-hours by 2030.

Being merely a "hauler" of electricity does not encompass the entire value of energy storage. Saudi Arabia is upgrading energy storage into an independent, investable, and long-term operational grid service industry through institutional design.

The first batch of large-scale energy storage projects launched by the Saudi Electricity Procurement Company adopts an innovative "Build-Own-Operate" model.

The winning bidder will establish a special purpose company, holding 100% equity in the project, and will sign a 15-year energy storage service agreement with SPPC. This means that the winning enterprise is no longer a simple engineering contractor, but has transformed into a franchisee providing long-term, stable "flexibility services" for the Saudi national grid.

Their income does not come from one-time equipment sales, but rather from service fees lasting up to 15 years. This model fundamentally changes the business logic of energy storage, attracting global energy giants such as China Energy Engineering, Envision Energy, and Electricité de France to compete for participation.

The deep value of energy storage lies in the fact that it is not only a tool for the "time travel" of energy but also the physical cornerstone for building a future power system with a high proportion of renewable energy.

In the Saudi Red Sea New City, a 100% renewable energy independent power grid composed of 400 megawatts of photovoltaic and 1.3 gigawatt-hours of energy storage has been put into commercial operation.

This proof of the world's largest off-grid solar storage microgrid demonstrates that energy storage combined with advanced grid-forming control technology can independently establish stable voltage and frequency without any support from traditional thermal power, providing reliable power supply for the entire city. This completely overturns the old perception that "new energy is unstable and must rely on traditional power sources."

At the national grid level in Saudi Arabia, the operational 500 MW/2000 MWh energy storage project serves as a system-level "stabilizer." By rapidly charging and discharging in response to grid dispatch instructions, it provides stable support for voltage and frequency across the entire system, significantly alleviating the frequency modulation burden on traditional power plants.

In the reshaping of the electricity trading system, the role played by Chinese enterprises is undergoing a profound transformation.

With technological and cost advantages, Chinese companies have become the main equipment suppliers and system integrators for Saudi Arabia's "power bank." BYD secured a super order of 12.5 GWh from Saudi Electricity Company, Sungrow signed a 7.8 GWh project, and Hicharge Energy won a 4.9 GWh project in the latest bidding at a record low price.

Chinese companies provide more than just battery cabinets. In the Red Sea project, State Grid NARI provided the core network-type coordinated control system, which is the "brain" that ensures the stable operation of the 100% renewable energy grid. This means that Chinese companies are upgrading from merely exporting hardware to providing comprehensive system solutions that include core control software, becoming the "architects" of the new power system.

More profoundly, by participating in the BOO model bidding, Chinese companies such as China Energy Engineering Group and State Power Investment Corporation are attempting to shift from being the "shovel sellers" to personally operating as "bankers" of the "power bank," deeply engaging in the long-term distribution of future electricity value in Saudi Arabia.

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