This study presents a techno-economic and environmental analysis of hybrid renewable energy systems to identify the optimal configuration for supplying the planned 850 MW renewable energy plant in Yanbu city, Saudi Arabia. Ten grid-connected system designs combining photovoltaic (PV), wind turbine (WT), and battery storage were simulated and optimized using the HOMER Grid software (1.10.2 pro edition). A site suitability analysis was conducted to evaluate potential locations based on climatic, topographic, and infrastructure-related factors. A sensitivity analysis considered variations in solar irradiation, wind speed, temperature, load demand, and economic parameters. The results showed that the PV-only system with an 850 MW capacity achieved the lowest net present cost (NPC) of USD 201 million and levelized cost of energy (LCOE) of 0.0344 USD/kWh, making it the most economically feasible option. However, a hybrid WT–PV configuration of 212.5 MW WT and 637.5 MW PV was also proposed to support local manufacturing. All proposed systems provided over a 91% renewable energy contribution while reducing CO₂ emissions by 53% compared to grid supply only. Up to 1152 jobs are estimated to be created through renewable energy deployment in Yanbu city.