May 04

dubai

The price of solar power just fell 50% in 16 months – Dubai at $.0299/kWh!:

Dubai received bid of $.0299/kWh for 800MW of solar power. This price represents the lowest yet recorded for solar power (and might not represent the end of the price drops…).

Dubai Electricity and Water Authority (DEWA) has received 5 bids from international organisations for the third phase of the Mohammed bin Rashid Al Maktoum Solar Park, said HE Saeed Mohammed AlTayer, MD & CEO of DEWA. The lowest recorded bid at the opening of the envelopes was US 2.99 cents per kilowatt hour. The next step in the bidding process will review the technical and commercial aspects of the bids to select the best one.

In the USA, in 2014 and with incentives, utility scale solar projects averaged $.05/kWh. On this bid alone, five companies bid below $.045/kW – without subsidies!

In 2015, we saw Dubai sign a deal at a fixed rate of $0.0584 cents over 25 years with no incentives. In the summer of 2015 Autin, TX received almost 1,300MW`of bids at under $.04/kWh. Shortly afterwards, we saw Berkshire Hathaway Inc.’s NV Energy agreed to pay $.0387/kWh for power from a 100-megawatt project that First Solar Inc. is developing. Lastly, just this month Enel Green power signed contracts for $.036/kWh in in Mexico and $.03/kWh in Morroco.

The price per kWh just fell 50% – and it did it in less than sixteen months.

Updates on the deal from other sites around the web – from PV-Magazine via CleanTechnica):

A total of five bids were received on May 1 for the third phase of the DEWA project, but it was the bid by a consortium led by Abdul Latif Jameel of Saudi Arabia, Fotowatio Renewable Ventures (FRV) of Spain, and Masdar of the UAE that grabbed the headlines. The consortium’s 2.99$c/kWh bid is 18% lower than the 3.65$c/kWh bid submitted by JinkoSolar of China, and also drastically undercut the 3.95$c/kWh tariff submitted by an Acwa Power-First Solar consortium. The two other bids were for 4.382$c/kWh – submitted by U.K./French firm Engie ad Japan’S Marubeni – and 4.482$c/kWh, submitted by a consortium comprised of France’s EDF and Qatar’s Nebras.

Dr. Moritz Borgmann at the Apricum – The Cleantech Advisory – added some color on the finance side of things:

It can be expected that both JinkoSolar and the third-lowest Acwa Power pushed their proposals very close to what can be considered commercially feasible today. One may speculate how Masdar and FRV seemingly manage to play in a universe of their own. Because the majority of the expenses for a solar power plant lie in the upfront cost of construction, which gets recovered over numerous years, the cost of financing is a key overall cost driver. One can suspect that Masdar had access to long-term financing through the wealthy emirate of Abu Dhabi that no commercial banks, the primary source of capital for the other bidders, could match in cost.

Francois-Xavier Boul, the senior vice president of Engie, said said at a Clean Energy Business Council event in Dubai on Tuesday in response to the $.0299/kWh – via  at The National:

“The size [in Abu Dhabi] is 350MW, so for sure you’ll have economies of scale,” he said, adding that there was a large amount of funding available for the Abu Dhabi project. “There’s a lot of appetite. This is going to be as aggressive [as Dubai].”

“Dubai is definitely the benchmark to beat,” said Frank Wouters, a former director of Masdar Clean Energy and a former chairman of Shams Power. “It would be very difficult to explain why Abu Dhabi’s [solar project] would have to be more expensive.”

Does that mean Engie sees an opportunity for LOWER PRICING?

solar chart

The According to the Office of Energy Efficiency & Renewable Energy,

As of November 2015, four years into the decade-long SunShot Initiative, the solar industry is about 70% of the way to achieving SunShot’s cost target of $0.06 per kilowatt-hour for utility-scale PV (based on 2010 baseline figures).

The price the SunShot Initiative wants is without incentives. It’s at this price that analysts believe utility scale solar power would be competitively priced, at grid parity, with other sources of electricity in the USA. Warren Buffet’s $.0387/kWh would potentially turn into about $.07/kWh if we backed out the 30% Federal Tax Credit and 60% depreciation in Year One. With solar power falling about 10% a year – Warren Buffet should be under $.06/kWh, no incentives, by 2018. Of course, not all installations are going to be built in the dry, sunny Nevada desert with customer credit scores as pristine as Warren Buffet (other than Dubai, of course).

Future-Solar-Cost-Projections-PPA-LCOE

Ramez Naam, How Cheap can solar power get?

According to Ramez Naam, optimist and technologist:

If solar electricity continues its current learning rate, by the time solar capacity triples to 600GW (by 2020 or 2021, as a rough estimate), we should see unsubsidized solar prices of roughly 4.5 c / kwh for very sunny places (the US southwest, the Middle East, Australia, parts of India, parts of Latin America), ranging up to 6.5 c / kwh for more moderately sunny areas (almost all of India, large swaths of the US and China, southern and central Europe, almost all of Latin America).

And beyond that, by the time solar scale has doubled 4 more times, to the equivalent of 16% of today’s electricity demand (and somewhat less of future demand), we should see solar at 3 cents per kwh in the sunniest areas, and 4.5 cents per kwh in moderately sunny areas.

According to Ramez, we shouldn’t be hitting solar at $.03/kWh in the sunniest regions until the year 2030 and 3200GW of solar power (we happen to be closer to 240GW). The European are hoping to have $.02/kWh by 2050 in the sunniest places on the continent – I’m betting we beat the price.

We just lit up the record boards about 14 years early. Paging Ray Kurzweil! Paging Ray Kurzweil!

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