At 2.99 US cents per kilowatt-hour, solar developers in Dubai have set a new record for the world’s cheapest solar power.
This latest move now means that the historically oil-rich United Arab Emirates now leads the world in affordable solar power.
The latest bid for solar power in Dubai would mean that for the first time solar would be cheaper than coal when compared to rates of a recently-commissioned coal plant.
The record-low bid to develop 800 megawatts of solar projects in the region, is 15% lower than the previous world record set by Mexico last month according to Bloomberg New Energy Finance.
Saudi Arabia’s Acwa Power International set a record in January 2015 by offering to build a portion of the same Dubai solar park for power priced at 5.85 cents per kilowatt-hour.
Records were subsequently set in Peru and Mexico before Dubai reclaimed its mantle as purveyor of the world’s cheapest solar power.
“This bid tells us that some bidders are willing to risk a lot for the prestige of being the cheapest solar developer,” said Jenny Chase, head of solar analysis at BNEF. “Nobody knows how it’s meant to work.”
DEWA has not announced who the bidders are, Bloomberg is reporting that it was a consortium of three companies: Masdar Abu Dhabi Future Energy Company, Fotowatio Renewable Ventures BV from Spain, and Abdul Latif Jameel from Saudi Arabia.
A consortium spokesperson clarified this is an active bid, which means the companies haven’t necessarily won the contract, but it’s a thrilling step for those who look toward a future where renewable energy is the cheapest power source available.
By 2030, the entire solar park facility should produce up to five gigawatts of clean energy. DEWA’s ultimate goal is to provide 25 percent of “total power output” in Dubai from renewable sources by that year, followed by 75 percent in 2050
The new record marks a dramatic plunge in solar power costs in the region – nearly 50% cheaper than the winning bid for a similar project one year ago.
As the National Bank of Abu Dhabi stated in an 80-page report last year: “Cost is no longer a reason not to proceed with renewables,” further reporting that even at $10/barrel for oil, solar is still the cheaper option.
But falling prices isn’t a trend limited to the Gulf region – the global cost of solar panels has fallen by around 80% over the last eight years.
It’s great to see the cost of solar power beginning to continually outcompete fossils fuels.
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