Masdar preferred bidder to build 1,800MW Solar PV IPP Project

Gulf Today, Staff Reporter

Saeed Mohammed Al Tayer, MD & CEO of Dubai Electricity and Water Authority  (Dewa), has announced that the Abu Dhabi Future Energy Company  Masdar is the Preferred Bidder to build and operate the 1,800MW 6th phase of the Mohammed bin Rashid Al Maktoum Solar Park for using photovoltaic (PV) solar panels based on the Independent Power Producer (IPP) model, costing up to Dhs5.51 billion.

Dewa has achieved, through this phase VI, the lowest Levelised Cost Of Energy (LCOE) of $1.6215 cents per kilowatt hour (kWh) for any of Dewa’s Solar IPP Projects so far.

Dewa has received 23 expressions of interest from international applicants to develop this project. Subsequently, the Request for Qualification (RFQ) was released to market on 15th November 2022.

“We are striving to achieve the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform Dubai into a global hub for clean energy and green economy.

We also support the Dubai Clean Energy Strategy 2050, and Dubai Net Zero Carbon Emissions Strategy 2050 to provide 100% of Dubai’s total power capacity from clean energy sources by 2050. To achieve this, Dewa launched several leading renewable projects, including the Mohammed bin Rashid Al Maktoum Solar Park, the largest single-site solar park in the world. Using the Independent Power Producer (IPP) model, it will have a capacity of 5,000MW by 2030 with investments totaling Dhs 50 billion,” said Saeed Mohammed Al Tayer.

“Dewa is committed to completing the phases of the Mohammed bin Rashid Al Maktoum Solar Park according to the highest international standards using the latest solar power technologies to enhance the shift towards a green sustainable economy by increasing the share of clean and renewable energy. When completed, the solar park will reduce over 6.5 million tonnes of carbon emissions annually. The 1,800MW 6th phase of the solar park using PV solar panels based on the IPP model will become operational in stages starting from Q4 of 2024. The project documents, Power Purchase Agreement (PPA), and financial close agreements will be signed in due course.

The total capacity of the solar energy projects commissioned at the solar park has reached 2,427MW.The share of clean energy in Dubai’s energy mix is about 16.3% of its total installed capacity. This percentage will reach 24% in 2026 with the completion of the Sixth Phase and the remaining phases under construction of the solar park,” added Al Tayer.

The projects at the Mohammed Bin Rashid Al Maktoum Solar Park, the largest single-site solar park in the world, are of great interest to international developers and reaffirms investor confidence in the significant projects supported by the Government of Dubai. Dewa has attracted huge investments to the UAE from the private sector and foreign banks, leading to increased cash flow to the economy of Dubai and the UAE. The Current total production capacity of solar projects at the solar park is 2,427MW. Dewa is building another project with a total capacity of 433 MW. The 1,800MW 6th phase of the solar park will increase the total production capacity to 4,660MW.

Meanwhile, Dews recently reported its second quarter 2023 consolidated financial results, recording quarterly revenue of Dhs7.3 billion and net profit of Dhs1.98 billion. For the first six months, Dewa’s consolidated revenue was Dhs12.7 billion and net profit was Dhs2.7 billion.

By the end of H1, 2023, the company’s net cash from operating activities increased by a record Dhs 837million to Dhs 5.4 billion, representing a stellar 18.2% increase versus the same period for  the last year.

Dewa’s first six month consolidated revenue increase of 5.4% to AED 12.7 billion was mainly driven by an increase in demand for electricity, water, cooling services and an increase in the revenues of DEWA’s other portfolio of assets. Revenue growth for electricity, water and cooling increased by 5.7%, 3.8% and 4.9% respectively. Dewa’s other portfolio of assets grew their revenue by 7.8%.

During the second quarter consolidated revenue increased by 4.1% to Dhs 7.3 billion, driven by an increase in demand for electricity, water and cooling services and an increase in the revenues of DEWA’s other portfolio of assets.

Demand for power in the second quarter reached 14.3 TWh compared to 14.0 TWh for the same period in 2022. DEWA’s second quarter gross heat rate for power was 8,230 BTU / kWh, which is a 4.2% improvement compared to the same period in the last year, reflecting higher operational efficiency resulting from the Company’s targeted sustainability and environmental efforts.