DUBAI // The Dubai Electricity and Water Authority (DEWA) announced on Thursday that it is doubling the output of a planned 100 megawatt (MW) solar power park, scheduled to come online in two years.
The new 200MW plant, expected to come supplying electricity from April 2017, will be the biggest such facility in the Middle East and North Africa. Currently, Dubai’s largest solar plant is a 13-megawatt facility built last year by American solar panel manufacturer, First Solar, which also operates it on behalf of DEWA.
The projects are part of the Mohammed bin Rashid Al Maktoum solar park, which is planned to have capacity output of 1,000MW by 2030.
Just like the existing plant, the new facility will rely on photovoltaic (PV) panels which will capture sunlight and transform it into electricity. The plant will cover a plot of 4.5 square kilometres. Experts say that a 100MW solar PV power plant is capable of powering roughly 200,000 homes. DEWA estimates that by 2020 the new plant would have helped prevent 250,000 tonnes of carbon dioxide from entering the atmosphere.
Saeed Al Tayer, managing director of DEWA, said the decision to increase the size of the facility came down to competitive offers received during the bidding process by companies looking to carry out the project, as well as Dubai’s desire to accelerate green energy projects.
“The price is very competitive, this is one thing, and - second thing - we would like to also increase the basket of renewables,” he said. “In order to increase, you have to accelerate; how to accelerate - by putting more green projects - and in the future you will see [that] more projects are coming.”
The new plant will be built and operated by Acwa Power, a Saudi Arabian power and water company, which was chosen from 10 bidders. Acwa will finance and build the plant, receiving a fixed tariff for the electricity produced over a period of 25 years.
The company’s initial offer was US$5.98 cents per kilowatt hour (kWh) for the 100-MW plant. When this was announced in November last year, experts said it was the lowest tariff for solar energy in the world. The original bid had contained further reduced rates if a larger plant was commissioned and, on Thursday, it was announced that the tariff would be lower still at US$5.84 cents per kWh.
Mohammad Abynayyan, chairman of Acwa, said that a contract between the company and DEWA is expected to be signed within two months, after agreements with banks financing the deal are finalised.
“Construction will start immediately after this,” he said. “This project for us is really strategic because it is in Dubai,” said Mr Abynayyan.
Vahid Fotuhi, president and founder of the Middle East Solar Industry Association, said the new project is “hugely significant” and the largest of its kind in the region.
“It blows away everything else and totally opens up the market for solar unlike ever before,” he said.
Mr Fotuhi said the Saudi company has a track record of successful conventional and renewable power projects.
“They are extremely good at designing, structuring and financing power projects, both thermal and renewable,” he said. “Just last week they won a 1.7 billion Euro contract to build a 350MW concentrated solar power (CSP) project in Morocco.”
Dr Moritz Borgmann, a partner in German advisory firm Apricum, said the low prices could hopefully prompt Gulf governments to re-examine their strategic renewable energy targets, which, he said, are lower compared to countries such as Germany, which already produces six per cent of its electricity from solar power.
“I certainly hope we will see much more solar than what has been anticipated,” he said. “This is something that the governments in the Gulf should look at.”