Lower renewable costs are changing the energy dynamic
Conventional sources of energy, such as, coal and gas, deplete and contribute to a significant increase in carbon emissions and as a result to climate change. However, the energy sector is in the midst of a transition which is resulting in the fastest uptake of clean energy in history. Dubai is at the centre of that transition and according to DEWA’s 2019 Green Economy Report, has committed to produce 75% of the Emirate’s energy demands through renewable sources. The Mohammed bin Rashid Solar Park, the largest single-site solar park in the world, plays a significant role in contributing to achieving this goal.
Faisal Albirdisi, CEO of Shuaa Energy 1 – a 200 megawatt photovoltaic (PV) plant which is the second phase of the Mohammed bin Rashid Solar Park said: “The Shuaa Energy 1 plant is spread across 4.5 square kilometres, which produces clean energy throughout the day to around 40,000 to 45,000 Dubai homes with electricity generated from clean power. The full park, once completed in 2030, will supply five gigawatts of renewable solar power to the grid thus, aiding in achieving Dubai’s clean strategy of 2050.”
He added: “We are blessed in this region to have such a remarkable resource – the sun. It makes sense for us and the region to utilise it to drive down costs and help reduce carbon emissions.”
Fossil fuels have traditionally been the preferred sources of energy due to price convenience despite the impact of solar energy on the planet. However, the decline in solar costs has changed the dynamics in the energy sector. Today, fossil fuels and renewables are competing in terms of cost, with renewables at an all-time low of 2.34 USD cents/kWh in 2018 as per the Renewable Energy Market Analysis: GCC 2019 by the International Renewable Energy Agency (IRENA).
Albirdisi said: “When Shuaa was awarded, it achieved a tariff that was the world’s lowest tariff for PV at that time - USD 5.6 cents/kWh, and it was with quite a margin of difference between the previous tariffs for PV that were ongoing. It showed the world that PV can be generated at a very competitive price and it really marked the beginning of the decline in PV tariffs worldwide.”
He further explained: “The advancements in technology coupled with smart financing, along with the movement of the supply chain and manufacturing the PV panels to China influenced the decline in PV prices.”
The fourth phase and also the largest component of the Mohammed bin Rashid Solar Park – Noor Energy 1 is also being developed by ACWA Power, is currently under-construction. It is a concentrated solar power (CSP)/PV plant spread across an area of 44 square kilometres, about 40% of the area of a big city like Madrid. The plant will consist of mirrored solar panels and is witness to the highest standards of design creativity. The plant will supply 320,000 residences with renewable energy. The 250 megawatt PV element of the project is unique in itself as it introduces the bi-facial technology in Dubai. The project has attained the world’s lowest Levelised Cost of Electricity (LCOE) at USD 7.3 cents per kWh for CSP technology.
Abdulhameed AlMuhaidib, Executive Managing Director of Noor Energy 1 explained: “Noor Energy 1 will make it possible to supply power around the clock (day/night) thus, setting it apart from Shuaa Energy 1 which was the first independent power producer (IPP) project in Dubai. The project is a joint venture between ACWA Power, Silk Road Fund and Dubai Electricity and Water Authority (DEWA) featuring the world’s largest CSP plant and the tallest central tower for any CSP plant which will be 260 metres in height.”
AlMuhaidib continues: “The advancing technologies in solar and storage that are coming into play, increase the reliability and availability of plants, making solar energy strong competitor against conventional power sources. The project will help Dubai’s strategy to deliver a consistent supply of green power to the Emirate and balance with the previously built renewable projects that dispatch during the daytime only. The project sponsor is the longest power purchase agreement (PPA) in the region with 35 years agreement.”
The project will be completed in four stages and as of 21st December 2018, Noor Energy 1 issued the full notice to proceed (NTP). Thus, within the span of 40 months the full project is scheduled to be delivered.
Written by Radhika Mathur