Abu Dhabi’s Masdar Picked to Build Solar Plant in Dubai

  • Masdar group to build plant at Dubai solar park by 2020
  • Power to be supplied at 2.99 cents per kilowatt hour: DEWA CEO

Masdar to Build 800-Megawatt Solar Park in Dubai

A Masdar-led group won the bidding to build a solar-power plant in Dubai to produce what could be the world’s cheapest electricity generated from the sun.

The consortium is set to complete the 800-megawatt power project by 2020, the head of utility Dubai Electricity & Water Authority said at a press conference Monday. Spanish renewable energy developers Fotowatio Renewable Ventures, a unit of Saudi Arabian conglomerate Abdul Latif Jameel, and Gransolar Group are part of the venture, DEWA said.

Dubai, the second-largest sheikhdom in the United Arab Emirates, is adding solar capacity to diversify its energy mix and help meet growing demand for electricity.  The Masdar project will generate electricity at 2.99 cents per kilowatt-hour, DEWA Chief Executive Officer Saeed Mohammed Al Tayer said.

“This project has set a benchmark now globally,” Saji Sam, a partner at consultants Oliver Wyman, said in an interview in Dubai on Monday. “The direction now is for lower cost in solar projects. That will help renewables take a bigger share of the energy mix.”

The price bid for the project would undercut the cost of power generated from coal. It’s 15 percent lower than the previous record for solar power set in Mexico in April, according to Bloomberg New Energy Finance.

The consortium will seek financing for the project, Masdar CEO Mohammad Jameel Al Ramahi said at the press conference in Dubai. DEWA will hold 60 percent of the joint venture company that will operate the 800-megawatt plant, with Masdar and the two Spanish companies holding the rest, Al Tayer said.

Dubai plans to invest 50 billion dirhams ($14 billion) to generate a total of 5,000 megawatts of power by 2030 at the desert solar park, helping provide 25 percent of the emirate’s electricity from clean energy sources. Dubai currently has 13 megawatts in operation at the desert site and a further 200 megawatts under construction. The project awarded to the Masdar-led group will make up the third phase of the park. DEWA this month announced plans to build a fourth phase consisting of another 1,000 megawatts.

Abu Dhabi, the largest emirate in the U.A.E., is seeking developers in a separate bidding process for a 350 megawatt solar project. Masdar, based in Abu Dhabi, operates a 100 megawatt solar-thermal plant in the emirate.

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