With record low tariffs on Dubai Electricity and Water Authority’s (DEWA) 800 MW Phase III project and Abu Dhabi Water and Electricity Authority’s (ADWEA) Sweihan project, we could call it a successful year for large scale solar on the Arabian Peninsula. Record low tariffs below 3 US$ cents per kWh attracted worldwide press attention.
These low prices have changed the perception of policymakers and industry leaders. It even led to a downward revision of the Feed-in tariff in Egypt and revives the debate of the usefulness of Feed-in tariffs versus competitive bidding in the MENA region. On an unsubsidized basis, solar PV without storage is now one of the cheapest sources of electricity available – it costs less than unsubsidized nuclear, LNG, and diesel used for off-grid power. Based on IRENA’s projections, solar PV LCOEs are expected to continue to decrease going forward, but whether it will continue to drop as rapidly is subject to debate.
The world record tariffs provided solar with an important jump-start of more large scale solar projects in the MiddleEast in 2016 (e.g. Saudi Arabia, Kuwait, and Jordan) and will drive even more large-scale project announcements and executions in 2017 in other countries (e.g. Oman and Tunisia).
The report foreshadowed the inevitable economic and social challenges we see unfolding today in Saudi Arabia. Saudi Arabia’s recently announced Vision 2030 and the NTP clearly outline ambitious renewable energy goals under the King Salman Renewable Energy Initiative. In line with the goals of Vision 2030, SASIA will continue to bring the local and international industries together, transforming the vast solar potential of Saudi Arabia into a commercially viable solution for the region’s growing electricity demand.
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