DEWA Selects Masdar Consortium

The much awaited Sheikh Mohammed bin Rashid Al Maktoum Solar Park of Dubai will see another 800 MW capacity being developed by a consortium led by Masdar. This choice for the third phase of the Sheikh Mohammed bin Rashid Al Maktoum Solar Park was expected, as out of the five finalists who bid for this capacity, the Masdar-lead consortium had offered the lowest bid of $0.03 per kWh (see Real Cheap Solar).

This ensures that solar PV power from this plant will be cheaper than power from most new fossil fuel based power plants and even onshore wind (see graph below from the new SolarPower Europe Global Market Outlook 2016-2020). With solar PV related power costs coming down literally every day, other upcoming plants are expected to will follow suit. Several experts in the solar industry doubt if the plant can be realized at such low cost, but it the system will be built only over the next 5 years, which leaves plenty of room for further cost reduction. Moreover, there is another good example in Dubai how quickly solar power prices have fallen – ACWA/First Solar, which won the earlier 200 MW Dubai tender at 5.84 US cents/kWh, was bidding in this latest tender at 3.95 US cents/kWh – that’s a 30% price decrease within 1.5 years.

Solar PV power from the new 800 MW PV plant will be not only cheaper than power from most new fossil fuel based power plants, but even than the lowest onshore wind PPA today, according to a new report from SolarPower Europe.

The 800 MW capacity will become operational in 2020, to coincide with the World Expo 2020 in Dubai. The solar park will eventually have a capacity of 5,000 MW by 2030, becoming the largest single site solar park in the world. The total investment is expected to be 50 billion AED ($13.61 billion). The park is being built at the Seih Al Dahal area of Dubai. It will also include a R&D centre, where solar testing will be conducted in two sub centres. The first one will be dedicated to photovoltaic technologies and the second will be devoted to studying concentrated solar power technologies.

The consortium led by Masdar, which has won the contract to build the 800 MW capacity, includes Spanish companies Fotowatio Renewable Ventures (FRV) and Gransolar Group. The project will be constructed as an independent power producer (IPP) model. On the selection of Masdar for the project, the company’s CEO Sultan Ahmed Al Jaber said, “Masdar is proud to have been chosen to develop the third phase of the Mohammed Bin Rashid Al Maktoum Solar Park in Dubai. The significant scale and competitive cost of this project are a clear signal that solar energy is a reliable and commercially viable technology.

Under the Dubai Clean Energy Strategy 2050, Dubai aims to generate at least 25% of its total power mix from renewables by 2030 and by 2050, it plans to reach 75%.

On June 26, 2016, the UAE Minister of State and Chairman of Masdar, the Abu Dhabi Future Energy Company, Sultan Ahmed Al Jaber and the Managing Director and CEO of Dubai Electricity and Water Authority (DEWA) signed a memorandum of understanding (MoU). The Vice President and Prime Minister of the UAE, Sheikh Mohammed bin Rashid Al Maktoum and other senior members of the UAE government were present on the occasion as well.

Al Tayer of DEWA said, “Encouraged by the favourable existing regulations and legislation in Dubai that permit private sector partnerships in power production projects in the Emirate, the 800 MW third phase of the Mohammed bin Rashid Al Maktoum solar park is the first project of its kind in the region with this capacity.”