Solar Power Megaproject Posts World’s Lowest Tariff

The Al Dhafra Solar PV project is slated to begin commercial operation in the second quarter of 2022.
Al Dhafra Solar PV Project. Image courtesy of Abu Dhabi Power Corp.

Although seriously hit by the oil crash in the first quarter of 2020, countries in the Middle East, which rely on power stations fueled by natural gas and crude oil, make way for the sun to shine over their investment vehicles. Most recently, Emirates Water and Electricity Co., a subsidiary of Abu Dhabi Power Corp., announced the lowest tariff for solar power in the world at an installation that’s set to be the world’s largest solar plant with a capacity to power approximately 160,000 households across the UAE.  

Although the cost of solar installations has dropped to just a tenth of their price a decade ago, oil remained even cheaper in the region, thus standing in the way of investment in renewable energy. Even so, UAE has made plans to invest $163 billion by 2050 to boost clean energy contribution in the country’s energy mix to 50 percent. Part of this plan is the Noor Abu Dhabi facility, which holds the title as the world’s largest single-site solar power plant, comprising some 3.2 million solar panels that generate nearly 1.2 gigawatts of power.

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Following the success of the Noor Abu Dhabi project, ADPower has announced the Al Dhafra Solar PV development, a 2GW solar photovoltaic independent power producer project, which not only breaks records for its size but at 1.35 cents per kilowatt-hour on a Levelized Electricity Cost basis also provides the cheapest tariff for solar power in the world. The cost is 44 percent lower than the one approved at the Noor Abu Dhabi solar farm.

The Al Dhafra Solar PV project received last July 48 expressions of interest from potential bidders, of which 24 were qualified to bid for it after submitting Statements of Qualifications and in November five were confirmed. The project is slated to begin commercial operation in the second quarter of 2022 and, upon completion, is estimated to reduce the Emirate’s carbon dioxide emissions by 3.6 million metric tons per year, the equivalent of removing 720,000 cars from the road.