Masdar group wins 800MW Dubai tender as PV power price fall goes on

A consortium led by Abu Dhabi clean energy group Masdar has secured a deal to build a landmark 800MW PV project in Dubai that is set to drive solar power prices to new record lows.

Masdar will be joined by Spain’s Fotowatio Renewable Ventures (FRV) and Gransolar in developing the third phase of the Mohammed bin Rashid Al Maktoum Solar Park following a tender held earlier this year.

That auction saw a clutch of final shortlisted bids as low as $29.90/MWh, according to a statement released in May by Dubai utility DEWA, without saying where that bid came from.

DEWA did not reveal the winning bid price in today’s statement announcing the signing of a memorandum of understanding (MoU) with the Masdar-led group. But anything around that level would represent another big dip in the ever-lowering benchmark for global PV power prices, which had already been driven well below $50/MWh by auctions held in Latin America in the last six months.

Plunging bids in South America, the Middle East and India have raised fears over the viability of projects.

But Masdar said: “The significant scale and competitive cost of this project are a clear signal that solar energy is a reliable and commercially viable technology.”

The Mohammed bin Rashid Al Maktoum Solar Park is a regional and global flagship project by Dubai, which plans to expand it to 5GW by 2030 at a cost of AED50bn ($13.6bn).

It began as a 13MW pilot project in the Persian Gulf emirate of Dubai, before being expanded through a 200MW second phase, which is due to enter service next year and which itself caused a stir with its own winning price of $58.50/MWh

DEWA released a Request for Expressions of Interest for the 800MW third phase of the project last September, and followed with a formal Request for Proposal in December.

After receiving 95 initial expressions of interest, the final field of bidders was narrowed to five.

The other four bids reportedly came from China’s JinkoSolar; Saudi Arabia’s ACWA Power and US partner First Solar; France’s Engie and Japanese partner Marubeni; and France’s EDF and Qatari partner Nebras.

The third phase is due into operation in 2020.

DEWA CEO Saeed Mohammed Al Tayer said: “DEWA received several offers from international solar energy companies, reflecting the trust and interest from investors in large projects adopted by the Dubai Government.

“Encouraged by the favourable existing regulations and legislation in Dubai that permit private sector partnerships in power production projects in the Emirate, the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park is the first project of its kind in the region with this capacity."

Late last year Dubai expanded its renewables ambitions, saying it will have 6.5GW of solar online by 2030 – enough to generate 25% of the emirate’s power.