July 1, 2016: Dubai has announced that it will build a gigantic 800 MW solar plant, and the key highlight is that the plant will produce electricity at the most reasonable cost of 2.99 cents per kilowatt hour. This means that Dubai is set to welcome the world’s lowest cost solar plant, surpassing the ever-dominant coal plant, which is the cheapest alternative as of now.
The cost is a complete 50% below the price a Saudi corporation bid just recently in the same solar plant in Dubai, a cost that at the time was a record less, but has since been eclipsed by ever-lower prices. This giveaway price offered by the developers doesn’t profit from any clear subsidies, and is the smallest price offered by any solar facility in the entire globe.
Dubai to build world’s lowest cost solar plant
That cost of less than 3 cents per kilowatt hour is one-third cheaper as compared to a coal plant, which is also being built in Dubai and is expected to launch by 202o.
Impact of plunging solar costs
Such plunging solar costs are indeed revolutionizing the electricity generating business. The solar project is based on the traditional photovoltaic (PV) technology; however of late, it seemed that the economies of large, so-called utility-scale projects, like this one would be cheaper using a latest and sophisticated solar technology called concentrating solar.
The solar technology collects the sun’s energy using molten salt, heating water and giant mirrors and produces power with the help of a steam turbine. The method of generating electricity by heating water to drive a steam turbine is rather similar to a traditional coal-fired power park. PV panels convert sunlight directly into power. The project also suggests that there is immense potential in the tried-and-true PV panels.
Key highlights of Dubai solar project
- The solar project is part of Dubai’s aim of building the world’s lowest carbon footprint and consists of the third phase of the Mohammed bin Rashid Al Maktoum solar park.
- The lead associate is Masdar, a clean energy company owned by the government of Abu Dhabi. The other associates are Spanish companies FRV and Gransolar Group.
- Shareholder and power-purchase agreements are expected to be signed in the final quarter of 2016.
- It is based on an Independent Power Producer (IPP) model, hence is structured as a commercial project.
With the new solar project, Dubai is expecting to reach 25% clean energy by 2030 and 75% by 2050.