The Abu Dhabi Water and Electricity Authority (Adwea) expects to wrap up details of its first solar power contract by the end of March – and to put a second project out to tender by this time next year.
In September a consortium led by Marubeni of Japan and Jinko Solar of China submitted the lowest bid for the emirate’s first solar project, a 350 megawatts photovoltaic (PV) plant in Sweihan.
“There will be other solar PV opportunities but it’s important that we get the template right for Sweihan,” Charlie Seymour, a financial adviser for Adwea, said in an interview on Tuesday at the World Future Energy Summit in Abu Dhabi. “I think we will be looking to go to market with a new project within the next 12 months.”
Adwea had received six bids for the Sweihan plant, with Marubeni and Jinko bidding 2.42 US cents per kilowatt hour (kWh), which is now the world’s lowest, beating the previous record of 2.91 cents set in August for a solar plant in Chile.
“Our schedule is to conclude all arrangements by the end of March, but the PPA [power purchase agreement] we anticipate in the middle of February,” Mr Seymour said.
The Sweihan plant is expected to be complete by the first quarter of 2019, Mr Seymour said, and down the road the emirate expects to build bigger solar plants.
“We are now in negotiations with our first ranked bidder [for Sweihan solar PV project],” said Aisha Al Mansoori, an engineer at the generation directorate of Abu Dhabi Water and Electricity Company, a unit of Adwea.
“We are negotiating our power purchase agreement, all the shareholders, all the documents (that need to be) put in place to fully award and go ahead to implement the project and reach project completion.”
Solar power is gaining importance under the UAE Energy Plan 2050. The plan aims to cut carbon dioxide emissions by 70 per cent, increase clean energy use by 50 per cent and improve energy efficiency by 40 per cent, resulting in savings of Dh700 billion between now and mid-century.
The plan’s targets for energy sources for local consumption by 2050 have been set at 44 per cent renewable, 38 per cent gas, 12 per cent clean fossil fuels and 6 per cent nuclear energy. At the moment, more than 90 per cent of the country’s energy needs are met by natural gas.
The country is spending Dh600 billion over the next 33 years, equating to annual spending of about Dh18bn, to integrate renewable, nuclear and clean fossil energy. Prominent in the country’s renewable energy plans is the Mohammed bin Rashid Al Maktoum solar park, which is being built in Dubai at a cost of Dh50bn. It is to be the largest single-site solar project in the world with a planned capacity by 2030 of 5 gigawatts – enough to power 800,000 homes.
Abu Dhabi’s installed power-generating capacity is 14.5GW, with demand for power growing by 3 to 5 per cent a year. Abu Dhabi is banking on using gas, nuclear energy and solar to meet its energy demand. The emirate is building the region’s first nuclear power plants, which are to have an installed capacity 5.6GW by 2020. It has no plans for coal.
“Solar PV is very important because of the economics of saving expensive gas at peak demand,” said Mr Seymour.
Abu Dhabi has no plans for concentrated solar power (CSP) plants. CSP comes with storage, which allows the solar power to be fed into a grid even when the sun is not shining. But this also means that CSP is more expensive than PV, which has a quicker installation time because it has fewer moving parts.
“If the market for CSP dropped dramatically and they become cheaper than PV then we go for whatever is economically driven and meets our security and supply standards,” said Ms Al Mansoori.
dalsaadi@thenational.ae
Follow The National's Business section on Twitter
