15th January, 2015 – Dubai, United Arab Emirates: A consortium led by ACWA Power, a leading water and power developer, owner and operator based in Riyadh, Saudi Arabia with international operations in 9 countries, and TSK, the Spanish engineering and construction company as technology provider, was announced by Dubai Electricity and Water Authority (DEWA) as first rank bidder to develop, construct, own and operate the solar photovoltaic independent power project of a net power capacity of 200 MW (260MWp installed) for the Phase II of the Middle East’s largest renewable energy power plant located at Mohammed bin Rashid Al Maktoum Solar Park, Dubai.
The winning bid has set a new global benchmark as it reduces the cost of electricity produced by solar energy by over 20 percent. ACWA Power will receive a levelized tariff of 5.84 USD cents/kWh for a 25-year power purchase agreement (PPA) starting in 2017.
The 200MW facility is the largest utility scale solar plant in the world competitively tendered in a single phase, and the first and largest in the Middle East. It will produce enough electricity to power 30,000 homes every year, using photovoltaic (PV) solar panels to generate electricity. It is estimated that the project will also reduce carbon emissions by 469,650 tons of CO2 equivalent emissions for every year of operation.
Paddy Padmanathan, president and CEO, ACWA Power, commented: “Dubai has a clear strategy to diversify its energy mix with renewable energy, and specifically solar, playing a key role. This when combined with a politically stable environment and the availability of low-cost finance means that solar PV technology becomes commercially cost-effective.
“We have established ACWA Power as the leading renewable energy developer in the region, and this project demonstrates once again that we live up to our commitment of delivering reliable and sustainable electricity at the lowest kWh tariff.”
The public tender for constructing Phase II of the Mohammed bin Rashid Al Maktoum Solar Park was launched in Spring 2014 using a build-own-operate (BOO) model. 24 independent power producers (IPPs) prequalified with bids from ten consortia being opened on November 20, 2014.
The ground breaking landmark tariff, which has been achieved using USA-based Firstsolar’s photovoltaic thin film PV panels, secured the project for ACWA Power who will finance and construct the power plant, and then receive the fixed tariff under the 25-year PPA. DEWA will take a 51 percent equity stake in the project and the developer will take 49 percent (ACWA Power and TSK in the proportion of 85/15).
Thamer Alsharhan, managing director, ACWA Power, said: “This project supports the vision of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to promote renewable energy sources. A capital intensive project of this type with a 25-year commitment necessitates a sustainable approach, a shared vision and common ambition.
“DEWA has demonstrated through its transparent, competitive tender process that it has those qualities which make it a world class utility. I hope this project creates the momentum for renewable energy to pick up significantly in the region.”
The project is the second phase of the development located on a 40 square kilometer site to the south-east of Dubai and further enhances the Green Economy for Sustainable Development initiative of His Highness Sheikh Mohammed bin Rashid Al Maktoum. Subsequent expansion will see the facility grow to produce 1,000 MW of electricity.
Rajit Nanda, chief investment officer, ACWA Power, said: “Having accumulated solid experience in the development of complex and cutting-edge fuel-efficient power and water plants of very large capacities across geographies, ACWA Power has now integrated its vision to encompass sustainability and deliver electricity at grid parity tariffs with the use of only the light of the sun.”
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