The Emirate of Dubai set a new world record for the cost of solar power on May 1, 2016 with the Dubai Electricity and Water Authority (DEWA) receiving bids for the 800 MW Sheikh Maktoum Solar Park Phase III as low as 3 U.S. cents per kilowatt-hour (kWh).
Editor’s take: In this case, the cost of capital is driving project development costs. As Apricum’s Moritz Borgmann surmises in this article, the lowest bidder here (Abu Dhabi’s Masdar in partnership with Spanish developer FRV, which was acquired by Saudi Arabia’s Abdul Latif Jameel group in 2015) surely has access to the Abu Dhabi government’s wealth and can borrow at rates that commercial banks could not match. This explains why JinkoSolar’s 3.69 US cents per kWh bid and First Solar/Acwa Power’s 3.96 US cents per kWh bid, still incredibly low, were beaten.
Still however, the top three bids are unprecedented and show that unsubsidized the cost of solar power in the Middle East beats fossil fuels. Said Borgmann: “As recently as October 2015, Dubai Electricity and Water Authority (DEWA) awarded the new Hassyan coal power station at a much higher tariff of 5.177 US cents/kWh. Gas-fired power plants in Dubai have an even higher generation cost.”
Yeh, but it’s ugly.