The two-gigawatt Al Dhafra project in Abu Dhabi, the world’s biggest single-site solar installation, is expected to deliver electricity at a record-low US1.35¢ per kilowatt-hour when it goes into service in 2022.
The bid to the Abu Dhabi Power Corporation came from a consortium consisting of Électricité de France (EDF) and the projects division of Chinese manufacturer Jinko Solar, Greentech Media reports.
“The selected consortium will own up to 40% of a special purpose vehicle created for the project, with the remaining stake owned by the Abu Dhabi Power Corporation and other, undisclosed government entities,” PV Magazine adds. The intended start date in the second quarter of 2022 “would represent only a marginal delay from the original two-year time scale stated in March, when the original date set for opening final price bids was postponed because of COVID-19-related public gathering restrictions” in the United Arab Emirates.
Greentech notes that Gulf states “have had more than their share of record-low solar prices of late,” with a project in Dubai offering power at 1.7¢/kWh last November, then a Qatar project led by French colossal fossil Total and Japanese conglomerate Marubeni coming in at 1.6¢ in January. “Now, three months later, the record looks set to pass back to the United Arab Emirates,” the industry newsletter says.
“There are numerous factors behind the ever-lower prices for solar in the Middle East, including great solar resources, large and flat sites, cheap-to-zero land costs, massive scale, and the cheap finance that comes with a 30-year power purchase agreement with a petrostate as the offtaker,” Greentech adds. “Both JinkoSolar and EDF have strong track records in the United Arab Emirates,” with Jinko teaming up with Marubeni on the 1.2-gigawatt Noor Abu Dhabi project, which went online last year.
Robert Borlick 
Mitchell Beer 
Based on this article we don’t really know what those low prices represent, particularly whether they have any bearing on the cost of solar energy in the US.
For example, it is stated that the cost of the land is essentially zero. That’s nice – and not likely to be replicated anywhere in the US. Secondly, what are the wage rates being paid for the projects’ construction labor? I suspect they are lower than anyone in the US would be willing to accept. Then there is the issue of whether the debt financing is being provided at below-market rates.
Before jumping to the conclusion that the US is going to see solar energy produced here in the range of 1 cent per kWh, these questions need to be answered.
Thanks, Robert. I don’t think anyone jumped to that conclusion. This was a story about the Middle East, not the United States.
Based on the capital cost and life cycle operating cost for this design the kWh contract price makes no sense for this technology or project.
Greg