MENA PV 'on way to €0.05/kWh'
The levelised cost of energy (LCOE) for electricity generated from PV in the Middle East and Northern Africa (MENA) region could fall below €0.05 per kilowatt hour ($0.068/kWh) in the next five years, according to Stefan Müller, chief operating officer at German solar EPC provider and consultant Enerparc.
Rock-bottom prices for solar generation can be reached in the region despite multiple constraints ranging from harsh environmental conditions in desert regions via regulatory challenges to a lack of trained staff, he explained during a panel on the MENA PV market at the Intersolar conference in Munich.
"This is the best area for PV (in the world) even considering the problems," Müller said.
"We see a very tangible cost reduction in this area for PV," he said, adding that low costs are the single most important driver for the development of solar generation in the MENA region.
As a project developer and EPC provider, Enerparc says it has connected more than 1.1GW since 2009 in India, the US, and the Middle East. It is also one of Europe's leading PV independent power producers, owning 650MW.
The LCOE in the MENA region currently already ranges between €0.07 per kWh and €0.08 per kWh, Müller says, even in areas where daily cleaning of solar panels from sand is required, such as in Dubai.
"That definitely will go down to below €0.07 per kWh next year," he reckons. Solar manufacturers already are developing solar modules specifically for the region's harsh environmental conditions, where sand storms, or salty water put a strain on panels, he stressed.
As a general rule, however, announcements of renewable programs across the region are followed by lengthy discussions and a very slow implementation process, and can be constrained by local content requirements, Müller added.
An example is Saudi Arabia's "gigantic" RE ambitions represented by its Ka-Care programme that set a 41GW solar target for 2032, but so far hasn't taken off.
"Ka-Care announcements were followed by long discussions…about who should run the show in Saudi Arabia," Müller says.
"The implementation is not clear right now. It will come, but we don't know when."