Dewa’s announcement yesterday that it will tender 500 megawatts of solar power next year could help to kick-start manufacturing facilities in the UAE and further reduce energy production costs.
The project is part of the 1,000MW Mohammed bin Rashid Al Maktoum solar park and will help the Dubai utility to increase its renewable energy target to 7 per cent by 2020 from 1 per cent set five years ago.
Establishing a solar photovoltaic (PV) production facility in the country – or even region – would cut manufacturing costs by 10 to 15 per cent, Claus Kuhn, the vice president at Manz, said on the sidelines at the World Future Energy Summit in the capital yesterday.
“We want to support and enable the [GCC] region to manufacture their own goods instead of importing from places like China,” he said.
Manz, a German turnkey solution provider for the solar industry, is currently in discussions with potential partners in Dubai, Abu Dhabi, Saudi Arabia and Qatar to help establish a manufacturing plant.
“If you want to set up a manufacturing hub, it’s the UAE,” Mr Kuhn said.
Dewa’s tender for a project of this size is because of the decline in PV prices, which have dropped 75 per cent over the past five years.
The 200MW second phase of the Dewa solar park, which was awarded to the Saudi firm Acwa Power, involved the world’s cheapest prices to date of 5.84 US cents.
“We thought that the prices would go down by 2020, but this was a surprise for us,” Mohammed Al Tayer, the chief executive and managing director of Dewa, said at WFES yesterday. “If you look at the prices from the first bidder and then the second – there’s no difference and it means prices worldwide are reducing.”
A joint venture between Spain’s Fotowatio Renewables and Abdul Latif Jameel Energy of Saudi Arabia came in behind the Acwa-led consortium at 6.13 cents, followed by Abu Dhabi-based Masdar at 8 cents – the market price that had been previously set in Brazil.
Mohamed Al Ramahi, the chief operating officer of Masdar, said that the prices for Dewa’s solar park had created a new standard. “Dewa’s achievement is a great milestone and a benchmark for all other countries to follow in the region.”
Mohamed Alammawi, the Manz vice president of sales in Mena, said: “Given the UAE’s rapid growth model and sustainability goals, this shift [towards manufacturing] may come sooner than expected.”
lgraves@thenational.ae
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