A local utility in the United Arab Emirates has started talks with a consortium that offered to build a 1.5 GW photovoltaic power plant and sell electricity for $ 13.5 per MWh. The offer from EDF and JinkoSolar broke the record set this year in Qatar. Solar energy has never been cheaper on a utility scale.
Électricité de France SA – EDF SA and JinkoSolar Holding Co. Ltd. from China submitted the best bid in November for what Abu Dhabi plans to be the world’s largest operational photovoltaic power plant. The Emirates Water and Electricity Co. (EWEC) just revealed that the lowest bid was AED 49.7 or USD 13.5 per MWh on an updated cost of electricity (LCOE) basis, never seen before. ‘now in the industry.
The companies will now negotiate a 30-year electricity purchase contract with the national utility. EWEC, controlled by Abu Dhabi Power Corp. or ADPower, may eventually turn to the second bidder.
If talks fail, Abu Dhabi’s EWEC may approach the second-ranked bidder
The Al-Dhafra project is expected to reach 2 GW, which would currently make it the largest in the UAE, although the tender is only for 1.5 GW.
ACWA Power of Saudi Arabia has partnered with Shanghai Electric and also reached the final stage among the five consortia. Engie from France participated with International Power and Al-Fanar. Japanese Marubeni and French Total also made a joint bid, as did SoftBank of Japan and Eni of Italy.
Investors get a minority stake
The process started in July and a total of 24 bidders qualified to finance, build, operate and maintain. Al-Dhafra is expected to go live by mid-2022, a slight delay from the original target due to the coronavirus crisis.
EDF and JinkoSolar will be able to own a maximum of 40% of the photovoltaic installation, while ADPower and other state entities will hold a majority stake.
Solar electricity in the Arabian Peninsula is the cheapest in the world
The winning bid compares to the previous record low in January – $ 15.6 per MWh. Total and Marubeni have made an offer in Qatar for an 800 MW project.
Abu Dhabi already has a gigantic solar power plant. Noor Abu Dhabi or Sweihan, with a capacity of 1.18 GW, started providing electricity less than a year ago. Sterling and Wilson from India built it and JinkoSolar and Marubeni developed the project. They signed a 25-year PPA with Abu Dhabi Water and Electric Authority (ADWEA) at a rate of $ 24.2 per MWh, also an all-time low at the time.
With 1.5 GW, Al-Dhafra would replace Noor as the fifth largest such facility currently in the world. It would now be ranked third at 2 GW.
Grants are a thing of the past
The cost of solar and wind equipment has fallen over the past decade and states are halting stimulus programs. In most countries of the world, they are now at the top of the list of power systems in terms of affordability.
Dubai builds the largest photovoltaic plant on the planet
It should also be noted that the Dubai Electric and Water Authority (DEWA) of the neighboring emirate of Abu Dhabi has awarded a contract for a 900 MW photovoltaic power plant to a group led by ACWA Power. The agreement for the fifth phase of the Mohammed bin Rashid al-Maktoum solar park was reached immediately after Al-Dhafra’s announcement.
The rate is USD 16.95 per MWh. It was agreed last year and the level was the lowest on record at the time.
The agreement for the fifth phase of the Mohammed bin Rashid al-Maktoum solar park was reached immediately after the announcement of Al-Dhafra
The electricity purchase contract is for a period of 25 years. The facility has reached 1 GW and a further 1.85 GW is currently under construction, which would already make it by far the largest in the world. Dubai has the ambition to expand it to 5 GW by the end of the decade.