In an exclusive interview with SolarQuarter Middle East, H.E Saeed Mohammed Al Tayer – MD & CEO, DEWA threw light on declining solar prices in the region, factors leading to the rise of rooftop solar, RE business models and solar PV trends in the Middle East.
1. How are the declining solar prices driving large scale utility projects in the Middle East?
Large-scale utility projects require a strong regulatory framework. In Dubai, we established a Regulatory & Supervisory Bureau for electricity and water (RSB) to encourage private sector investments. When Dubai Electricity and Water Authority (DEWA) started the 13MW first phase of the Mohammed bin Rashid Al Maktoum Solar Park, one of the main challenges was the price.
DEWA has put in place a full mitigation plan to meet its requirements with world records low prices in solar. In 2015, and as part of the 3rd pillar of the Dubai Clean Energy Strategy 2050, Dubai launched the ‘Dubai Green Fund’, worth AED 100 billion, to finance investments in clean energy.
DEWA achieved world-leading results by applying a successful Public Private Partnership practice known as the Independent Power Producer (IPP) model. This has been highly effective in five main directions: The first is establishing a comprehensive legal and regulatory framework to attract and protect foreign investments. The second is that it has caused reputable international solar power companies to deliver state-of-the-art technologies without the need for our own direct investment.
Focusing on the IPP model has enabled us to divert our investments towards other areas, such as the Research and Development Centre at the solar park. The third is building Emirati capacity and skills in collaboration with international organisations and universities. The fourth, increasing efficiency: We started our journey with early generation thin film photovoltaic panels having an efficiency of 11.8% and now we reached 19% efficiency with mono-PERC solar cell technology.
Moreover, using self-cleaning and an advanced solar tracking system, we have increased energy yield of the plant by around 24%. The fifth has been one that has had global effect for the solar power industry, in that the various phases for the solar park have resulted in five world records for solar tariffs in the bids. In October 2019, DEWA received the lowest bid of USD 1.6953 cents per kilowatt hour (kW/h) for the 900MW 5th phase of the Mohammed bin Rashid Al Maktoum Solar Park.
DEWA is currently upscaling its solar power projects to achieve the Dubai Clean Energy Strategy 2050 to provide 75% of Dubai’s total power capacity from clean energy sources by 2050. The Mohammed bin Rashid Al Maktoum Solar Park is one of DEWA’s key projects to achieve this ambitious goal, which requires a capacity of 42,000MW of clean and renewable energy by 2050. It is the largest single-site solar park in the world based on the IPP model. The solar park has a planned capacity of 5,000MW by 2030 with investments totalling AED 50 billion. This shows the priority our wise leadership gives to clean and renewable energy projects, which has contributed to its global cost reduction.
2. Which factors are leading to the rise of rooftop solar in the MENA region?
According to the MENA Solar and Renewable Energy Report 2019, by MESIA (Middle East Solar Industry Association), renewable energy usage has been growing significantly over the past 12 months. This trend will continue to increase as solar power prices reach grid parity. In 2019, the global estimated additions of solar PV reached almost 138 GW. In the Middle East and North Africa, the increased industrial activity and drive towards renewables is reflected in each country’s strategy.
Continuous population growth and economic development have placed pressure on existing power assets and in some cases, created a significant gap between electricity production and demand.
Affordable renewable energies in the region, mainly solar have become an obvious solution. The continuous drop in costs for solar panels is one of the factors that have contributed to reducing CAPEX of both utility-scale and distributed rooftop projects. The other enabler has been the development of distributed solar regulation in certain jurisdictions, with some of them also providing attractive feed-in tariffs or net metering schemes.
DEWA launched the Shams Dubai initiative in 2015, to encourage customers to install photovoltaic panels on their rooftops to generate electricity and export any excess to the power grid.
Shams Dubai has been very successful and by the end of October 2020, a total of 6,598 sites were connected to DEWA’s grid, with a total capacity of 252 MWp DEWA has also received additional applications for 164 MWp.
This transforms energy consumers into producers and will achieve the vision of the wise leadership to manage demand and diversify energy sources within the concept of the smart and happy city.
This will ensure a sustainable future for generations to come.
3. What are the new commercially attractive RE business models in the Middle East?
As a utility, we have found the IPP model to have been a highly successful means of developing Public-Private Partnerships and this is an excellent option for the expansion and installation of clean energy in the region. Innovation will continue within the model through accessing a wider and different pool of developers and financiers. Distributed solar power has become very popular in Dubai, which we manage under our Shams Dubai initiative, and this trend is likely to continue. This procurement option allows customers to benefit from renewable generation without an upfront capital investment and benefitting from the warranties provided by knowledgeable industry players arranging the financing and taking the project execution risk. It’s unclear though to which extent this option will gradually become available also for smaller projects.
4. What are the current and expected future Solar PV trends in the Middle East region?
This past decade has truly been the era of solar power, with people and businesses around the world developing and manufacturing more panels, as we regularly witness and learn about new inventions and innovations that solar companies are offering to the end-users. Manufacturing and installation of photovoltaics is also creating many new jobs.
Very soon, we will use this technology in other areas such as in infrastructure we use every day, as well as our home and office windows. In October 2020, CNN reported that solar power is poised for what could be its biggest transformation in over half a century. A group of materials called perovskites are being used to create the next generation of solar panels, which could eventually be twice as efficient as current models, and flexible enough to wrap around entire buildings.
Researchers at Oxford PV, a company spun out of the University of Oxford, made a major breakthrough in 2018. By coating silicon with perovskite they achieved 28% efficiency. The company believes it can eventually reach 40%, or higher.
Improved solar cell efficiency will enable installations to pump out more power with fewer panels, reducing costs, and the amount of land, labour and equipment needed to operate them. IRENA published a report in November 2019, entitled ‘Future of Solar Photovoltaic’ that refers to
perovskites citing their advantages and current challenges. The report says: Perovskites still face some significant challenges before achieving market maturity. One of the main ones is durability.
Because the crystals dissolve easily, they are not able to handle humid conditions and need to be protected by moisture through encapsulation, for instance through an aluminium oxide layer or sealed glass plates. Another challenge for scientists is that, while they have been able to achieve high efficiency levels with small perovskites, they have not been able to replicate such effects with larger cell areas. If these barriers can be overcome, perovskite cells have the potential to change the dynamics and economics of solar power because they are cheaper to produce than solar cells, and can be produced at relatively low temperatures, unlike silicon. Apart from the use of perovskites, a number of other technology developments are ongoing.