The price of solar electricity in Dubai is about one third the price of electricity in Vietnam

A record low electricity price has just been set, it shows an important step forward for solar power as the world is facing the pressure of rapidly reducing emissions of CO2.

Dubai Kingdom in the United Arab Emirates United Arab Emirates has set a new world record on solar electricity prices on May 1 last. The Dubai Electricity and Water Authority received a bid for the Sheikh Maktoum Solar Park Phase III solar power plant project at a record low price, only 3.00 US cents (equivalent to 666 VND) per kWh of electricity.

This price is not only low compared to solar power, but also easily defeated fossil energy use options in Dubai.

In Vietnam, the electricity price falls around VND 1700 / kWh.

At the time of bid opening, DEWA is only intended for a 200 MW AC production facility, but with options in the next phases, this project has the potential to become the largest solar power plant. world with 800 MW capacity. This solar power plant project will be operated as an independent power production facility (IPP), built by BOT, with contractors proposing a technical and financial solution, then they will own and operate for 25 years.

The lowest bid is offered by the Joint Venture between Abu Dhabi Masdar and Spain's FRV developer (acquired by Abdul Latif Jameel of Saudi Arabia in 2015). In addition, according to industry insiders, the second lowest price belongs to China's solar electric module manufacturer and developer, JinkoSolar, at 3.69 cents / kWh (equivalent to 820 VND). The third is the Joint Venture between Saudi electric company Acwa Power and First Solar, the pioneer of thin film solar cell production in the US, at a price of 3.96 cents / kWh (equivalent to 880 VND). .

Two French joint ventures, one between Engie and the Japanese Marubeni company, came in fourth with a price of 4.44 cents / kWh (equivalent to 986 VND) and one between EDF with Qatar's Nebras Power ranked fifth with a price of 4 , 48 cents / kWh (equivalent to 995 VND).

Single-axis tracking technology allows an increase of nearly 15% of the electricity obtained compared to fixed shaft systems.

This price is a remarkable result when they ended the winning series of Acwa Power, who won two previous bids of DEWA IPP, Sheikh Maktoum Solar Park Phase II and more recently Hassyan coal-fired power plant. This time Acwa was defeated by JinkoSolar, the company not only led the world in terms of prices for solar electric modules, but also showed its ability to develop projects at very competitive costs.

However, the lowest bid belongs to the Joint Venture between Masdar FRV and ALI. Previously, the FRV / ALI joint venture was also overtaken by Acwa when bidding for Sheikh Maktoum Solar Park Phase II factory project. But this time, it seems that they have found a formula for their victory, when cooperating with Masdar, also known as Abu Dhabi Future Energy Company, a subsidiary of Mubadala investment fund.

Many people may wonder how contractors can offer such low prices? The biggest contribution to this low price is the lower cost of capital for the project, most of which comes from lower cost components and more efficient system designs (solar panels arrangement system). . Another important technical factor contributing to this low price is the widespread popularity of single axis tracking technology , which enables solar panels to rotate in the optimal direction with the sun.

This technology allows an increase of nearly 15% of the electricity obtained compared to fixed shaft systems, further reducing the cost of the entire system.

With such cheap prices, solar power plants can beat power plants that use fossil fuels for costs.

Defeat fossil power on costs

Although it failed, even the second and third prices in this bidding marked an important and unprecedented milestone in the progress of renewable energy. All three of these lowest bid levels have set a new world record on the cost of solar electricity without subsidies. Mexico's Enel Green Power recently recently bid for 3.6 cents / kWh (equivalent to 800 VND) but does not include additional costs for green energy certificates. US solar PV rates are often lower than 3 cents / kWh but do not include 30% tax incentives and other subsidies.

In addition to setting a new world record for solar PV prices, this bid also shows that large-scale solar power plants can now defeat power plants that use fossil fuels for costs. In October 2015, DEWA's Hassyan coal-fired power plant project won a bid for a much higher price, 4,501 cents / kWh (equivalent to 1,000 VND), while gas-fired power plants in Dubai have a The price is even higher, even though this is an eminent resource of the emirate.

Just a few years ago, no one could imagine that solar power would defeat all fossil energy sources in 2016.

A global effect

This event, though not surprising to industry insiders, will result in a seismic event for the global energy market. At this time, fossil power plants are not only under pressure to reduce carbon emissions due to the Paris climate agreement, but also because of the absolute competitive advantage of the cost of solar power (and wind electricity). Just a few years ago, no one could imagine that solar power would defeat all fossil energy sources in 2016.

This result is expected to further boost global solar power development, especially in countries with solar advantages with increasing electricity demand. Dubai and surrounding countries are looking to build similar solar power plants. The power company of Abu Dhabi and ADWEA has just launched a bid for a 350 MW solar power plant.