Saudi Arabia dismisses world’s lowest bid of 1.79 cents for solar power

Saudi Arabia has declined the world’s lowest submitted tariff for a solar photovoltaic (PV) project, choosing to shortlist the second and third candidates instead.

The kingdom will tender its first commercial scale solar PV plant next month, according to the energy ministry’s Renewable Energy Project Development Office (Repdo) on Thursday. A list of eight candidates was announced in October with Abu Dhabi’s Masdar and French partner, EDF, submitting the world’s lowest bid ever for solar PV at 1.79 US cents per kilowatt hour – breaking the 2 cent threshold.

Yet the only companies in the running for the 300 megawatt Sakaka project are the second and third lowest bidders: Saudi Arabia’s Acwa Power with a bid of 2.34 cents and Japan’s Marubeni at 2.66 cents. Their bids beat Middle East’s lowest bid recorded last year for PV plant– 3 US cents per KWh in UAE.

Repdo said: “All eight bids that were submitted have been subjected to a detailed evaluation of material compliance to request for proposal (RFP) requirements, including the 30 per cent local content component for Round 1 NREP projects. All companies that have submitted bids for [round one] Sakaka PV RFP are invited to participate in future projects of the NREP.”

Masdar and EDF Energies Nouvelles, in a joint statement, said that they respected the “outcome of its tender process and remain committed to supporting the realization of Saudi Arabia’s renewable energy program”.

A key component for the project was to have local financiers on board; however, some submissions – including Masdar – did not list any banks. Masdar and EDF are also said to have included bifacial solar panels as part of their proposal. The technology, aptly named, allows solar energy to be collected from both sides of a module. Bifacial could be a disruptor in the future, but has so far never been commercially deployed.

Saudi Arabia has continued to stress how serious it is to deploy renewable energy, and the ministry has issued clear guidelines, kept to [most] dates and is actively pursuing best practices. This is a major step as some industry insiders questioned if the race to the bottom – seen in other countries – was realistic.

One solar industry developer told LinkedIn Energy Reporter LeAnne Graves: “Saudi Arabia may have just made the Middle East market credible again.”

(The report originally appeared in LinkedIn)

One Comment

  • Groups quoting less than 3c per kwh are streching themselves too far. With present state of technology even 3 cents is an impossible bet. whatever be the level of sacrifize, costs should be reasonable for manufacturers and contractors.Otherwise it is slaughtering.

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