Economic diversification from an oil-based economy, rapid industrialization, growing population, and increasing demand from water desalination facilities have led to an increasing demand for energy in Middle East, making renewable energy economically attractive, especially in the United Arab Emirates.
The Clean Energy Strategy 2050, launched by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the U.A.E. and Ruler of Dubai, foresees to provide 7 percent of Dubai’s total power output from clean energy sources by 2020, 25 percent by 2030, and 75 percent by 2050.
The country has been at the forefront of the developing renewable energy in the MENA region. This is reflected by the establishment of important associations, companies, projects and events related to renewable energy. Some examples are the Abu Dhabi Future Energy Company Masdar and the first carbon-neutral zero waste city Masdar City in 2006, the hosting of the annual World Future Energy Summit in Abu Dhabi since 2008, the International Renewable Energy (IRENA)’s designation of Abu Dhabi as its headquarters in 2009 and relocating to Masdar City campus in 2015, and the development of strategic large scale solar projects.
Regarding Utility Scale projects, many Middle East Countries still rely on the single-buyer model where a state-owned entity is the only wholesale purchaser from power generating companies. The single buyer is responsible for selling the electricity to distribution companies which then sell to the final consumers. While the power-generating sector is open to the private sector, governments still have monopoly over transmission and distribution networks.
The current market structure in the Gulf area has served IPPs well, as governments assume most of the risks related to the long-term purchase of electricity. IPPs are usually offered 15 to 25-year Power Purchase Agreements (PPA) where the government agrees to buy the electricity at a ‘take it or leave it’ basis at a previously agreed price for the duration of the contract, thus mitigating demand-side risk.
Contracts under the IPP model are usually awarded to developers who provide the lowest levelised cost of electricity (LCOE).
The most important utility scale solar project in the United Arab Emirates is the multi-phase Dubai Mohammed Bin Rashid Al Maktoum Solar Park. The first phase of 13 MW has been completed in 2013 while the second phase of 260 MWp has been connected to the grid in March 2017. After a landmark Power Purchase Agreement (PPA) of 5.85 cents per kilowatt-hour was signed for the second phase, 2016 saw Phase III awarded with 800 megawatts for delivery over three phases until 2020 at 2.99 US$ cents per kWh. The 800MW solar PV Phase III will be operational by 2020, and the first stage of the 700MW CSP fourth phase will be commissioned in Q4 of 2020. The final size of the solar park will be 3 GW in 2030 making it the largest of this kind in the world.
Other countries in Gulf area, such as Saudi Arabia, Oman and Jordan have constructed and are developing utility scale solar.
Enerray, as a global leader in the design, construction and management of solar systems, thanks to a business model that fully covers all the stages of project implementation, combined with the ability to attract financial resources and consolidated technical know-how, is the ideal industrial partner for those who want to safely invest in photovoltaics.
Enerray can participate to international tenders for utility scale solar PV and can give support to customers who want to participate.
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