Saudi Arabia is set to have the world’s cheapest prices for solar electric generation as part of its wide-ranging renewable energy programme.
Abu Dhabi Future Energy Co (Masdar) and EDF Energies Nouvelles have submitted the lowest bid to build the first utility-scale solar plant in the Kingdom.
The solar project will kick-start a $50bn programme to diversify the Kingdom’s domestic energy supplies away from fossil fuels.
The 300-megawatt solar photovoltaic (PV) project is in Sakaka, the Al Jouf Province in the north of the kingdom.
The two companies submitted a joint bid for a levelised cost of electricity (LCOE) of 6.69 halalas/KWH ($0.0178/KWH). Saudi-based Acwa Power came second with 8.78 halalas/kwh, reported Reuters.
The LCOE comprises the cost of generating a megawatt-hour (MWh) of electricity; the upfront capital and development cost; the cost of equity and debt finance and operating and maintenance fees.
“All of the bids opened today (Tuesday) will now undergo stringent technical, financial and legal evaluation,” Turki al-Shehri, the head of the Energy Ministry’s Renewable Energy Project Development Office (REPDO) told Reuters in a statement.
He did not comment on the bids for the project, which he said would be awarded to the bidder with the lowest LCOE who meets all compliance criteria set out in the request for proposals, including a 30 percent local content requirement.
The bid evaluation will be a three-month process, with a targeted power purchase agreement (PPA) effective day by Jan. 27, he added.
“The LCOE quoted by the winning bidder will be the most accurate measure of the potential related to this project. The lowest bidder today is not guaranteed to be awarded the project,” said Shehri