Dewa signs power purchase agreement for fifth phase of solar park

The Mohammed bin Rashid Solar Park is expected to generate 5000MW of electricity by 2030 and is expected to drive up to Dh50 billion in investments. Image courtesy of Masdar

Dubai Electricity and Water Authority signed a 25-year power purchase agreement with Saudi Arabia's Acwa Power for the fifth phase of the Mohammed bin Rashid Al Maktoum solar park.

The 900 megawatt phase will be commissioned in stages starting from the third quarter of 2021, according to the utility.

Acwa Power submitted the lowest bid of 1.69 US cents for the fifth phase of the Sheikh Mohammed bin Rashid Solar Park in November. Dewa chose the Saudi power developer's bid from among 60 requests for qualification from international companies.

Dubai aims to generate 25 per cent of its energy requirements from renewable sources by 2030 and 75 per cent by 2050 as part of its clean energy drive. Dewa is building the world’s largest solar energy park in the Dubai desert in an effort to reduce reliance on natural gas and diversify its power sources.

The Mohammed bin Rashid Solar Park is expected to generate 5,000MW of electricity by 2030 and is estimated to drive up to Dh50 billion in investments.

The fifth phase of the project is being implemented through the Shuaa Energy 3 company in which Dewa holds a 60 per cent stake, with the remainder held by a consortium including Acwa Power and Gulf Investment Corporation.

"The recent developments in the oil industry have proved the importance of the UAE’s track to bid farewell to the last barrel of oil and diversify the energy mix," Dewa chief executive and managing director, Saeed Mohammed Al Tayer, said.

The solar park's operational capacity has reached 1,013MW from solar photovoltaic panels. A further 1,850MW of PV and concentrated solar power capacity is under construction, said Mr Al Tayer.

"This supports our efforts to achieve the Dubai Clean Energy Strategy 2050, to provide 75 per cent of Dubai’s total power output from clean energy by 2050," he added.

The UAE has ramped up efforts to increase its renewable energy capacity at a time of record low oil prices. On Tuesday, a planned 2GW solar scheme in Abu Dhabi - the oil hub for the UAE - received the world's lowest tariff on the basis of levellised costs of electricity.

Emirates Water and Electricity Company, a subsidiary of Abu Dhabi Power Corporation, said it received a cost-competitive tariff for solar PV energy of 4.97 fils per kilowatt hour (1.35 US cents/kWh)

The Dhafrah project, which will be built through an independent power producer model, will cover an area of 20 square kilometres and could provide electricity to 110,000 households across the UAE, according to Ewec.