Abu Dhabi has achieved a record low cost for electricity generated by solar power in a deal with an Asian consortium to build the world’s largest single-site solar facility in the emirate.
The Abu Dhabi Water and Electricity Company (Adwec), the procurement arm of the Abu Dhabi Water and Electricity Authority (Adwea), signed a 25-year power purchase agreement with Japan’s Marubeni and the Chinese firm Jinko Solar for a 1.17 gigawatt solar power plant in Sweihan, according to a statement released by Marubeni.
Six bids were submitted in September for a “minimum net power capacity of 350 megawatts together with associated infrastructure and facilities”. Marubeni and Jinko submitted a record-low bid for 1.17GW at a weighted 2.42 US cents per kilowatt hour (kWh), The National has learnt. Adwea declined to comment.
A Jinko Solar spokesman told The National that it believed that the 2.42 cent price level was the new normal for the solar industry.
The Adwec-cited non-weighted bid price at 2.94 cents for the Sweihan plant is 1.67 per cent lower than Dubai’s 800MW third phase of the Mohammed bin Rashid Al Maktoum solar complex.
The cost of electricity from solar depends on numerous factors including the type of land, photovoltaic (PV) panel prices and the cost of financing.
Solar panels, depending on the developer, can make up between 25 and 40 per cent of total project costs. And prices have fallen by 80 per cent since 2009, according to the Abu Dhabi-based International Renewable Energy Agency.
The variables driving down the cost of solar power are important to the UAE and wider region. Demand for electricity will grow by 7 per cent annually in the Middle East North Africa region, according to the Economist Intelligence Unit.
As the need for electricity grows alongside projected growth in economies and population, solar energy has become the cheapest form of new power generation.