Dubai’s IInd Phase of Solar Park Project

Dubai made news all over the world with the 5.4 cents/kWh PPA that it signed with Saudi Arabian company ACWA Power, for its 100 MW phase 1 solar park. The tender then had received good response with 45 bidders bidding to get this project. This competition had led to the low price of the project. Since then a number of projects around the world have seen 6 cents and below prices. USA is now regularly seeing 4-5 cents/kWh PPA being signed in the southwest. Jordan too saw a low price being bid for a large solar power plant.

Now Dubai is again seeing massive interest for its 800 MW power project that it plans to build in the solar power park. The company has seen 95 developers participating in the EOI. One would have thought that after the low price (and low return), most developers would have fled the Dubai market. But this is not apparently so. The large size of the tender and the strong credit profile of DEWA has seen strong bidder interest. Dubai should see a lower price in my view, given the increase in interest and lower prices of solar components now as compared to two years ago.

Dubai ultimately wants to build 3000 MW of capacity in this solar park by 2030, which will help contribute to 15% RE generation of the overall electricity mix. The tender for this project will be issued in 2016 after the process of EOI and RFQ is completed. DEWA will have a chance to shortlist the 95 developers going forward.