The race to bring cheap solar energy to the marketplace has become Dubai’s triumph this month, as its state utility company, the Dubai Electricity & Water Authority (DEWA), has promised solar electricity for just 5.98 cents per kWh. This is the lowest price per kW ever to be achieved for solar energy.
Earlier this year DEWA opened a tender for a 100 MW solar plant as part of its second phase of the Mohammed bin Rashid Al Maktoum solar park. The 40-square-kilometer park south of Dubai is already home to a 13 MW solar park, built in 2013. The goal of achieving a 1,000 MW installation by 2017 eclipses these recent installations. To make a 1,000 MW plant a reality, DEWA called on solar developers to submit bids for a fixed tariff, over 25 years, under a build-own-operate model. The long awaited commitment to solar energy by the state utility company has been welcomed by solar industry players, who felt that the local market was missing out on solar energy. This has likely to have been caused by delays in Saudi’s mega solar plans. Many global companies have attempted to lower the price of solar with solar innovation, but it seems scale, as with anything, is key to cutting its cost by so much.
Of the 24 solar developers who bid on the DEWA contract, only 10 remained at the final bidding round. The winner, Acwa Power, a Saudi conglomerate, bid the lowest, at just 5.98 cents/kWh. The average of the other finalists came in at 9.35 cents/kWh. The highest bidder was made by Huaneng Power International of China, bidding at 14.71 cents/kWh. The winning Acwa Power bid is therefore very competitive. The closest runner up was the consortium of Fotowatio Renewables and Saudi Abdul Latif Jameel Energy. Their bid came in at 6.13 cents/kWh. It seems that the rapid expansion of the solar market of the Middle East is just beginning and is gathering pace.