Solar PV Cost Competitive in Middle East, New Analysis Finds

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Andrew wrote a few weeks ago on Saudi Arabia perhaps becoming the next solar hotspot, and we’ve written a few pieces recently on big projects or ideas for projects in the Middle East and North Africa (MENA) region. A new analysis by the Emirates Solar Industry Association (ESIA) and sponsored by international consultancy firm PwC contends that we may just be getting started with such stories, as solar photovoltaic (PV) power is now “cost competitive” with conventional fossil-fuel-based electricity generation (not even taking into account massive externalities).

This report is titled “Sunrise in the Desert: Solar Becomes Commercially Viable in the Middle East” and was presented at an ESIA press conference on January 17 at the World Future Energy Summit (WFES) in Abu Dhabi, United Arab Emirates (UAE).

“Factors such as falling costs of solar PV panels, rising costs of fuels used in conventional power generation and excellent fit to demand patterns challenge the prevailing view among many policy makers and utilities in the MENA region that solar is expensive unless heavily subsidised,” Sara Ver-Bruggen of pv magazine writes.

“In the case of some countries in the Middle East, such as Saudi Arabia, domestic consumption of fossil fuels is steadily rising creating a demand for new sources of electricity.”

Of course, being a hot and sunny region, solar is an ideal source of power at the time of day when the most energy is needed. Thus, it is especially useful for cutting high peak-demand costs.

“With the introduction of 3.5 GW of nominal solar PV capacity the optimal generation mix changes and the use of open-cycle turbines at midday can be replaced by solar generation saving high-cost fuel,” Robin Mills, the report author, noted at the press conference in Abu Dhabi.

More from Ver-Bruggen:

“In his presentation slides, Mills showed that the cost of solar PV (at USD2.5/W) versus that for gas or oil-fired generation, with solar cheaper than an open-cycle peaking unit at gas prices above USD5/MMBtu, which is equivalent to oil at around USD30 a barrel, but requires USD17/MMBtu to be competitive with baseload combined-cycle power, which is around current LNG prices.”

More info is available on ESIA’s website.

Source: pv magazine | Saudi Arabia solar reflectors via martnpro

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Zachary Shahan

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