Dubai Solar Bid Awes Market Players

Dubai-Solar-Park-570x408 Bidding to win a 100-megawatt solar photovoltaic (PV) contract for Dubai state utility DEWA, Saudi Arabia’s Acwa Power in November stunned solar industry players by submitting a tender-low bid of 5.98 U.S. cents per kilowatt-hour.

Acwa has become well known for its aggressive bidding in solar energy tenders across the Middle East-Africa region. Nonetheless, its sub-6 cents per kWh bid was unprecedented, setting a new record-low cost for the building and operation of new utility-scale solar energy facilities globally.

The record-low bids submitted during DEWA’s recent tender, and others in countries such as Brazil and South Africa, will prompt project developers to recalibrate their valuation models in light of: lower equipment and soft costs; higher performance; and more efficient and cost-effective operations and maintenance. It will also prompt national governments and utilities across the region to further streamline and reduce the administrative overhead associated with bidding and gaining approvals to construct solar energy facilities, Apricum-The Cleantech Advisory’s Dr. Moritz Borgmann asserts.

Solar’s rise in the GCC

With their economies still overwhelmingly dependent on revenues from oil and natural gas, Gulf Cooperation Council countries’ commitments to deploy renewable energy resources on the whole have been relatively slow, gradual and halting. The region’s untapped solar energy potential is vast, however, and solar industry players and other clean energy proponents continue to press ahead and work to accelerate construction of both solar PV and concentrated solar power (CSP) plants.

The United Arab Emirates is at the forefront of solar energy development and deployment in the region. Abu Dhabi is home to Masdar City, a grand experiment in sustainable city development, as well as an international hub of renewable energy and clean tech research and development.

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Abu Dhabi is also home to IRENA, the International Renewable Energy Agency. In addition, the emirate can boast of being home to Shams 1 – the largest CSP, or solar thermal, power plant in Asia.

The neighboring emirate of Dubai in 2009 set a goal to meet 5 percent of its electricity needs from renewable energy resources by 2030. In 2012, DEWA launched the Mohammed bin Rashid Al Maktoum Solar Park, awarding a contract to First Solar to engineer, procure and construct a 13-MW solar power facility. To date, 21 MW of solar power capacity is up and running in Dubai. Earlier in 2014, DEWA issued a tender notice to increase the capacity of the solar park by 100 MW.

Dubai’s government is going further to spur solar energy deployment: Aiming to establish a retail market for solar energy, new regulations were issued this past September that would permit property owners to install rooftop solar PV systems.

New record low utility-scale solar power

FS-Phase-1-Mohammed-bin-Rashid-Al-Maktoum-Solar-Park-14-620x310
Demonstrating just how cheap and quick to deploy solar energy facilities can be, the results of DEWA’s latest solar tender are likely to have far-reaching effects across the solar power market and industry value chain across the Middle East and beyond. As Dr. Borgmann wrote in a Nov. 27 post on the Apricum-The Cleantech Advisory blog:

“[T]he DEWA project results can be expected to have a lighthouse effect for the development of renewable-energy projects in the Gulf region, demonstrating that the cost-effectiveness and scalability in particular of solar PV technology has still been widely underestimated. We expect the momentum for renewable energy in the region to pick up significantly after this long-awaited and necessary milestone.”

Acwa Power’s stunningly low bid, and the overall results of DEWA and other solar tenders in developing markets, may also reignite Saudi Arabia’s lackluster efforts to deploy solar power capacity.

“In particular, Saudi Arabia is now even more in the spotlight for failing to deliver on its promise of a 42 GW solar-energy procurement program, which has stalled since the responsible government entity K.A.CARE went into hiding in 2013 amid political struggles behind the scenes,” Dr. Borgmann adds.

“The fact that its smaller neighbor Dubai can create such an apparent success should be an additional incentive for Saudi Arabia to move forward, given the traditional rivalry among Gulf monarchies for prestigious projects.”

*Images credit: 1) DEWA; 2) Masdar; 3) First Solar

An independent journalist, researcher and writer, my work roams across the nexus where ecology, technology, political economy and sociology intersect and overlap. The lifelong quest for knowledge of the world and self -- not to mention gainful employment -- has led me near and far afield, from Europe, across the Asia-Pacific, Middle East and Africa and back home to the Americas. LinkedIn: andrew burger Google+: Andrew B Email: huginn.muggin@gmail.com

31 responses

      1. The Curiosity Mars Rover is powered by a radioisotope thermoelectric generator. While RTG is a fascinating technology, it has nothing to do with wind or solar.

        Wind proved to be very useful for the earlier Spirit rover when a dust devil unexpectedly cleared dust from the solar panels. That significantly increased the power generation and helped extend the life of that project (6 years is about how long we expect a car to run on earth).

        1. The Mars Rovers sent in 2004 are 100% solar powered. One is still working without having any maintenance or cleaning, even once. The other one stopped working because it got stuck but the solar panels themselves were still working until the end. The battery died because they weren’t able to move the rover to a solar advantageous position.

        2. The Curiosity rover, sent in 2011, is powered by 11 pounds of plutonium-238 dioxide. The smaller Spirit and Opportunity rovers, sent in 2004 (Opportunity is the one still running), were solar powered. You are correct that no one has traveled to Mars to clean them, even once.

    1. It generally doesn’t accumulate on tilted slippery surfaces subject to wind. In addition, there are easy and cheap robot cleaning methods. The Mars Rovers sent in 2004 were never cleaned. One is still operating 11 years later and it is solar powered.

      1. A car in the Middle East gets covered with a dirt film in one day, and wind doesn’t make any difference. They have very cheap slave labor there, and they will be out there with squeegies. This is still a small power facility, a full size power plant would be ten of these. Also it takes a lot of fossil fuel power to manufacture, transport and install the facility.

        1. Cars in the Middle East do not get covered with a dirt film in one day. I’ve been there and it’s simply not true. The desert is mostly clean and dry. Wind makes a huge difference as sand does not adhere to slippery surfaces unless it’s wet.

          It takes a lot less fossil fuel than a diesel, coal, or natural gas power plant to make a solar plant. It also takes enormous amounts, much bigger amounts, of fossil fuel and energy to drill, produce, transport, and refine fossil fuels and then burn them. Indeed, some oil fields are using solar power to heat steam for enhanced recovery methods.

    1. They are absolutely stupid for not having done it yet. They’ve been burning oil that could have been sold to others when they could have generated their electricity for cheap with solar PV.

      1. Better not to speak and appear stupid than to speak and remove all doubt. Their cost for oil is on the order of $1 per barrel. They don’t have large natural gas reserves, gas infrastructure, or coal like the US does.. PV is fairly new technology, and not large scale power plants like they need. Also they have desalination plants coupled with their power plants, to produce fresh water because water is scarce. PV does not support desalination.

  1. Hanwha Solar (world’s #1 in solar) is also developing projects in Saudi Arabia. Very interesting to see oil producing nations taking a lead in installations in their land.

  2. The bigger the project the better. Their use of solar will reduce oil demand. Their use of large numbers of panels will send lots of money to panel manufacturers. A portion will get used for more R&D to help reduce panel production pricing. They sooner or later will want/need storage (batteries) of some kind. Tesla and other battery makers will get some of the business. All of this spending will send lots of money from the rich Gulf oil states to the non-Muslim world.

    All of this will help the ecology, reduce demand for oil, help lower the price of solar technology.

    And the BEST part of all – there will be less money for the mullah/mosque infrastructure that trains jihadis to kill non-Muslims.

    This is a good deal for free speech and Charlie Hebdo.

  3. I think the author is mixing up Kilowatts and watts. Solar panels are about 250 watts and run about $250 or a dollar a watt. This article is saying 6 cents a kw or about 1.5 cents per panel. A 100 megawatt plant would cost $6000

      1. Since Acwa is a big power conglomerate and owner-operator, dv watts is probably correct, but author did not make this clear. A small and easy to operate plant like this could be owned and operated by DEWA.

  4. I guess they can bid and build these solar plants so cheaply because they have no EPA? Clearly there are threatened species that aren’t being protected. In CA we build solar plants that are vastly more expensive.

  5. I’m not stunned. I don’t have access to high volume pricing or the near slave-wage labor available there or the better sun they have there . . . But my self-installed PV system generates electricity at less than 6 cents per KWH. I am a little surprised though. But with volume pricing, low labor, a system that tracks, and great sun . . . I can see it.

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