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Solar power costs have fallen rapidly during the last years due to cheaper modules, systems, and increased competition at the development and EPC level. Solar assets therefore become less risky and financing costs have also decreased. Todays’ solar power is cheaper than most alternative power sources, while Saudi Arabia is able to offer the cheapest solar power in the world.
Thierry Lepercq, founder and president of France-based Solairedirect, commented: “For systems with the right economies of scale — 10MW and above — solar power can now be generated at between US$70 and US$100/MWh. That price is more than four times lower than in 2009.” Solairedirect develops large PV power plants with low levelized cost of energy (LCOE).
Within this price range, Saudi Arabia could offer some of the lowest LCOE levels. Lepercq will be speaking regarding this topic at the second edition of Desert Solar Saudi Arabia conference from 17th –18th September. The event will gather stakeholders in the Saudi Arabian solar energy market and host more than 150 decision makers from across the industry. In addition, the panel of speakers will include executives from Air Liquide MENA, E.ON, King Abdullah University of Science & Technology (KAUST), and Tokyo Electron Taiwan, as well as Skypower Fas Energy, Solairedirect and First Solar.
By exploring the business case for utility-scale solar plants, Lepercq plans to offer talks about the future of Saudi Arabian solar business. He suggests that Saudi Arabia is possible to reach a solar LCOE of between US$70/MWh in the higher irradiation/elevation areas in the western part of the kingdom, and around US$90/MWh in the Gulf area. This circumstance leads the kingdom emerge as a new – and promising -- solar market.
“Recent developments in Saudi Arabia, such as the interest of local investors in financing PV projects and the growing amount of traction that EPC companies are gaining, are a clear indication of the Kingdom’s potential to evolve into a sustainable solar energy market,” said Dr. Raed Bkayrat , Vice President for Saudi Arabia at First Solar. “With access to all the critical elements – low-cost finance, land availability, high solar irradiance and locally-based, skilled resources – there is no reason why Saudi Arabia cannot achieve some of the lowest PV levelized costs of electricity in the region.” Dr. Bkayrat will be sharing insights on solar-powered desalination solutions for Saudi Arabia at the Desert Solar conference.
Imtiaz Mahtab, a board member of the Saudi Arabia Solar Industry Association (SASIA), added: “The local PV manufacturing sector, already under development leveraging KSA’s industrial infrastructure, with region-specific PV R&D initiatives at local institutions, would provide a further boost not only to additional cost decrease but also to increased human capital development in the Saudi solar sector.”
Further cost reductions can be expected as all cost factors continue to improve, down to US$50–US$70/MWh by 2020, according to Lepercq. By then, solar PV power would be by far the cheapest energy in the world.
(Photo Credit: Inde @ Pixabay, share by cc 0)
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