A local utility from the United Arab Emirates is starting talks with a consortium which offered to build a 1.5 GW photovoltaic plant and sell electricity for USD 13.5 per MWh. The bid by EDF and JinkoSolar broke the record set this year in Qatar. Solar power has never been cheaper at utility scale.
Électricité de France SA – EDF SA and JinkoSolar Holding Co. Ltd. from China submitted the best offer in November for what Abu Dhabi plans to be the biggest operational single-site photovoltaic plant in the world. The Emirates Water and Electricity Co. (EWEC) has just revealed the lowest bid was AED 49.7 or USD 13.5 per MWh on a levelized electricity cost (LCOE) basis, unseen so far in the industry.
The companies will now negotiate with the domestic utility about a 30-year power purchase contract. EWEC, controlled by Abu Dhabi Power Corp. or ADPower, can eventually turn to the second-ranked bidder.
If the talks are unsuccessful, Abu Dhabi’s EWEC can approach the second-ranked bidder
The Al-Dhafra project is planned to reach 2 GW, which would make it the currently biggest in the United Arab Emirates, though the tender was for only 1.5 GW.
ACWA Power from Saudi Arabia partnered with Shanghai Electric and also reached the final stage among the five consortiums. Engie from France participated with International Power and Al-Fanar. Japan’s Marubeni and France’s Total also gave a joint offer, as did SoftBank from Japan and Eni from Italy.
Investors get minority share
The process started in July and 24 bidders qualified in total to finance, build, operate and conduct maintenance. Al-Dhafra is scheduled to come online by mid-2022, a slight delay from the original target due to the coronavirus crisis.
EDF and JinkoSolar can own a maximum of 40% of the photovoltaic facility, while ADPower and other state entities will hold a majority stake.
Solar electricity in Arabian Peninsula is world’s cheapest
The winning bid compares to the earlier record low from January – USD 15.6 per MWh. Total and Marubeni gave the offer in Qatar for an 800 MW project.
Abu Dhabi already has a gigantic solar power unit. Noor Abu Dhabi or Sweihan, with the capacity of 1.18 GW, started delivering electricity less than a year ago. Sterling and Wilson from India built it and JinkoSolar and Marubeni have developed the project. They signed a 25-year PPA with Abu Dhabi Water and Electric Authority (ADWEA) at a tariff of USD 24.2 per MWh, also an all-time low at the time.
At 1.5 GW, Al-Dhafra would replace Noor as the fifth-biggest facility of its kind currently in the world. It would now be ranked third at 2 GW.
Subsidies are history
The cost of solar and wind power equipment has dwindled in the past ten years and states are stopping stimulus schemes. In most of the world, they now top the list of electricity systems by affordability.
Dubai building biggest photovoltaic facility on planet
Also of note, Dubai Electric and Water Authority (DEWA) from Abu Dhabi’s neighboring emirate awarded a 900 MW photovoltaic plant contract to an ACWA Power–led group. The deal for the fifth phase of the Mohammed bin Rashid al-Maktoum Solar Park was agreed immediately after the Al-Dhafra announcement.
The tariff is USD 16.95 per MWh. It was agreed last year and the level was the lowest ever at the time.
The deal for the fifth phase of the Mohammed bin Rashid al-Maktoum Solar Park was agreed immediately after the Al-Dhafra announcement
The power purchase agreement is for 25 years. The facility has reached 1 GW and 1.85 GW more is currently under construction, which would already make it the biggest in the world by far. Dubai has the ambition to expand it to 5 GW by the end of the decade.