ACWA Power says it sent lowest bid for Dubai’s $1 bln solar project

Riyadh-based ACWA Power International has sent in the lowest bid on the $1 billion project that will provide electricity to the grid for the Dubai Water & Electricity Authority (DEWA) between 4 pm and 10 am, Bloomberg reported, citing ACWA Power CEO Paddy Padmanathan.

ACWA bid 9.45 cents per kilowatt-hour, the news agency said. Each of the bidders was also asked to submit an alternative tender. The buyer will choose between the bid and the alternative.

The 200-megawatt Dubai contract will run for 25 years and aims to harness a nearly 20-year-old technology known as concentrated-solar or solar thermal.

Thermal plants use mirrors to concentrate sun’s heat on water, turning it to steam to drive a turbine. The heat can be stored in molten salt for later use – even after dark.

In comparison, photovoltaics (PV) generate a charge directly from the sun.

The solar thermal technology, which had been lagging behind PV due to higher costs, is now more competitive, the CEO said.

“I expect concentrated-solar power (CSP), within 18 months, to be head to head with combined-cycle gas, if not more competitive,” Padmanathan was quoted as saying.

“The focus has been on PV and batteries, but there’s a limit on how long they can hold a charge for. We’re proving that CSP can work through the night,” he added.

The CEO said he expects more plants like that of DEWA to follow because Chinese companies will start driving down the cost of equipment.

“There are currently just two suppliers in solar CSP,” Padmanathan said. “The others have gone bankrupt. I know of at least five Chinese companies that are starting to enter the market.”

ACWA has also built similar projects in Morocco’s Noor solar complex and South Africa’s desert, and is seeking to build two more projects in Morocco that will have a joint capacity of 350 megawatts.

“I’m also hoping to build one in Saudi,” Padmanathan said. “Right now they’re tendering for solar PV and wind, but I think they’ll want a CSP project as well, especially when they see how cost competitive it can be.”