Feature - Solar Energy

PVs Low Solar Tariffs

A Hot Topic in MENA

April 2017

Feature - Solar Energy

PVs Low Solar Tariffs

A Hot Topic in MENA

April 2017
Countries are at war with greenhouse gases caused by high energy consumption especially in industry intensive locales and so the search is on for more sustainable and cost effective energy solutions. Globally, over 178 GW of power was installed in 2015 and is estimated to reach more than 600 GW by 2023, including both photovoltaic (PV) and concentrated thermal power (CSP), according to research by Global Market Insights. The Middle East and Africa regions are expected to grow at as significant rate buoyed by increases in electricity fees and untenable government subsidies to the energy sector. The Photovoltaic (PV) market was estimated at around 40 GW in 2015. The CSP market is estimated to reach more than 25 GW installations during the forecast period.

PV is preferred due to its high utility while CSP is not economical for small installations and needs direct sun radiation rather than diffused light, making it less desirable. The technology is beneficial on account of several incentive schemes such as feed in tariff (FIT), tax rebates for renewable energy usage, and subsidies from the government. The global solar energy market share is shared between major companies such as Tata Power, BHEL, Abengoa, Canadian Solar, Renesola, Sunways AG, Motech Industries, and Solar World AG, said Global Market Insights. The Middle East and North Africa's (MENA) solar energy market is witnessing a boom spurred on by government-driven schemes aimed at driving down costs and luring investments. The region is home to some of the world's lowest solar tariffs. According to the International Energy Agency (IEA), long-term contract prices for utility-scale PV are as low as USD58/MWh in the UAE and USD61-USD77/MWh in Jordan. The agency forecasts that by 2021 renewable capacity in the MENA region will grow by 78 percent, led by the UAE, Egypt and Morocco, the MENA Solar Market Outlook for 2017 reported. In the UAE, DEWA's 800 MW-third phase of the 5 GW Mohammed bin Rashid al-Maktoum solar park drew international media attention in June 2016 for its low tariff of 2.99 US cents/kWh. Abu Dhabi's 350 MW Sweihan PV project submitted an even lower bid of 2.42 US cents/kWh with plans to expand the plant to 1,170 MW at 2.30 US cents/kWh. CSP projects are at different stages of development in Kuwait, the UAE, Saudi Arabia, and Morocco. A report by Middle East Solar Industry Association (MESIA) found that the MENA region has 885 MW of solar power capacity in operation, 3,610 MW under execution and 1,300 MW under tender. It recorded a total solar PV project pipeline in the MENA region of 4,050 MW in 2017, while the entire solar power pipeline stands at more than 5.7 GW. The sector is slowly making use of camera-carrying high tech drones no more than three-feet long and weighting less than 2lbs, able to survey wide regions and help design solar power farms that can fit more solar panels on a piece of land, quicker and at lower costs. Although the adoption of renewables might appear a threat to traditional pillars of state finance such as oil and gas, they are nonetheless a potent source of the economic diversification schemes which will allow MENA region economies to be more financially safe in the long term, S&P Global Platts stated.