Abu Dhabi Power in talks with EDF, Jinko to install the solar farm that will be larger than 4,200 soccer pitches
A pairing of Electricite de France’s renewables arm and China’s Jinko Solar is the lead bidder to build a solar farm larger than 4,200 soccer pitches that would supply power at what could be record-low prices.
Abu Dhabi Power Corp. in the United Arab Emirates received five bids to build the 2-gigawatt solar project, one of the world’s largest.
The winning bidder will take a 40% stake and sign a 30-year deal to sell power, John Hurst, head of capacity procurement at Emirates Water and Electricity Co., a unit of Abu Dhabi Power, said in a phone interview.
Super-sized solar projects have become increasingly common as developers use scale to drive down generating costs. The UAE, like Saudi Arabia and other oil producers in the Gulf, is pushing harder into renewables to diversify its energy supply and reduce its reliance on crude.
Abu Dhabi, the UAE’s largest emirate, holds most of the OPEC member’s oil reserves.
Other bidders for the Al Dhafra Solar PV project included Saudi Arabia-based Acwa Power, Engie SA, Marubeni Corp. paired with Total SA’s solar arm, and SoftBank Energy with Eni SpA.
Detailed negotiations are to take place with EDF and Jinko. Hurst expects to sign a power purchase agreement in a month or two and secure financing about two months after that. If a deal with the leading bidder can’t be reached, then Abu Dhabi would turn to the second-placed bidder, Acwa Power, he said.
EDF and Jinko offered a price of 1.35 cents per kilowatt-hour, Hurst said. While that number is more of an estimate than a guarantee of what users will actually pay, it’s a good indication that power from the plant will be cheap.
BloombergNEF estimates that some of the cheapest PV, or photo-voltaic, projects financed in the last six months will be able to achieve a “levelised cost of electricity” that’s about two times greater than what EDF and Jinko offered.
“It’s very likely that the land and grid connection are being provided by the state, and with a very large project, economies of scale in building and operation will be optimized,” said Jenny Chase, an analyst at BloombergNEF. Al Dhafra could have a total equity value of about $240 million, she said.
The project will more than double Abu Dhabi’s solar generating capacity to 3.2 gigawatts. It adds to another giant solar project in the emirate, the 1.2-gigawatt Noor Abu Dhabi facility, which started commercial operations last year.
Abu Dhabi plans to organise a request for proposals in the last quarter of this year to build another solar farm of at least 2 gigawatts, Hurst said.