Solar becoming competitive in Middle East

The Acwa Power bid of just 6c/kWh for a 100 MW solar power project in Dubai raised the hackles of the energy industry worldwide because of its stunningly low price. 6c/kWh can match both coal and gas power in most parts of the world and is competitive, if not cheaper than fossil fuel prices. Many thought that this was a one of thing, as Acwa Power was trying to prove its credentials in the Middle East region. But a new 200 MW solar auction in Jordan has again got bids between 6-7c/kWh. The lowest bid by a Greek firm was just 6.13c/kWh, which means that this price has become the new normal price for solar PV plants in the Middle East. While the Middle East is gas and oil rich, there are some countries like Jordan and Morocco which do not have a lot of energy resources and depend on imports of fuels. This new solar price means that Jordan will look to increase its solar power capacity targets, as it will be cheaper to do solar rather than building gas power plants.

Even Saudi Arabia, Kuwait and other major countries in the region will be forced to look at solar energy. These countries heavily subsidize their energy prices and some power plants in the region still run on very expensive crude oil derivatives. Saudi Arabia has not built any big solar power project, despite big plans to do so. Saudi needs to increase its power capacity from 60 GW to 120 GW by 2032, to meet the growing energy demands of its increasing population. The country will be incentivized to build solar energy, which has become so cheap. It will also be useful for the governments to bolster their green credentials without having to pay money for it. Note Middle East countries have been notorious in their disregard for climate change, despite some being the richest countries in the world in terms of per capita income. They are also the biggest contributors to climate change and pollution due to the massive exports of gas and crude oil.

The National

The lowest ever bids for a solar power project in Jordan could lead to a boom in the region – especially in Saudi Arabia, industry experts say.The second round of Jordan’s solar independent power producer (IPP) tender, totalling 200 megawatts, drew the lowest rates for a solar project in the country. The top four bids will each be awarded 50MW.The lowest bid came from a relatively unknown Greek firm, GI Karnomourakis SunRise PV Systems, at 6.13 US cents.

This is half the amount of the winning bid in Jordan’s previous round and also only a slight difference of about 10 per cent from the world-record breaking solar PV prices in Dubai’s Mohammed bin Rashid Al Maktoum solar park, according to the UAE-based solar trade organisation Middle East Solar Industry Association (Mesia).Jordan is said to be looking at generating 10 per cent, or 600MW, of its electricity via solar in five years. The country imports 96 per cent of its oil and gas, most of which is used to generate power. It is a major drag on its import bill.It should also be noted that two of the top four bidders in Jordan’s projects are Saudi firms, Saudi Oger with a bid at 6.49 cents per KWh and Abdul Latif Jameel/Fotowatio at 6.91 cents.In January, Saudi Arabia announced that it would delay its clean energy target, which included a US$109 billion solar programme, by eight years to 2040.The country now plans to more than double its available generating capacity to 120 gigawatts from 58GW by developing solar and nuclear power projects, according to the US energy information administration.