Abu Dhabi solar scheme receives lowest tariff in the world

The 2GW solar scheme is expected to be completed in the second quarter of 2022

The Emirates Water and Electricity Company is planning to develop a giant two-gigawatt solar farm in Al Dhafra. Wam

Emirates Water and Electricity Company received a record-low bid for a planned two gigawatt solar photovoltaic project being developed in the Al Dhafra region of Abu Dhabi.

The company, a subsidiary of the Abu Dhabi Power Corporation, said it received a cost-competitive tariff for solar photovoltaic energy of 4.97 fils per kilowatt hour (1.35 US cents/kWh) on the basis of levelised electricity costs.

Ewec did not disclose the name of the lowest bidder.

Acwa Power, EDF in consortium with Jinko Power, International Power-Engie, Marubeni in consortium with Total Solar, and SoftBank Energy Global alongside Eni submitted technical and commercial bids for the scheme, according to an Ewec representative.

The company will move ahead with negotiating a power purchase agreement with the shortlisted bidder, he said.

The UAE accounts for 4 per cent of global crude output, much of it from oilfields in Abu Dhabi. The emirate is diversifying its energy mix, adding solar and nuclear sources to its grid, as it looks to free up its hydrocarbons for export markets.

Abu Dhabi intends to generate half of its power requirements from clean energy sources by 2030.

The planned two gigawatt PV project comes after the start-up in June of the 1.7 gigawatt Noor Abu Dhabi plant.

That project, built at a cost of Dh3.2 billion, is a joint venture between Abu Dhabi Power Corporation, Japan's Marubeni and China's Jinko Solar.

The tariff received on the Dhafra scheme is 44 per cent lower than the one generated for the Noor Abu Dhabi project, the emirate's first solar PV scheme.

"Securing such competitive tariffs on our energy projects is fundamental to support economic growth across all sectors in the UAE," said Ewec chief executive Othman Al Ali.

"We look forward to signing the power purchase agreement and to delivering the project in the second quarter of 2022".

With the addition of the latest project to the grid, Abu Dhabi's total solar power generation capacity will stand at 3.2 gigawatts.

Ewec tendered financing, construction, operation, and maintenance packages for the Dhafra solar plant in July, for which 24 companies qualified to submit bids.

The company was created in 2019 after a presidential decree and replaced the Abu Dhabi Water and Electricity Company as part of efforts by the regulator, the Federal Electricity and Water Authority, to consolidate power and water generation assets across the emirate.

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.

IPPs are typically not owned by the state but build and operate power plants for the sale of electricity to buyers, which could include a utility, the government or end users.