Work has begun on the third phase of Dubai’s Mohammed bin Rashid Al Maktoum solar park and a tender for the fourth phase is expected in June, according to the Dubai Electricity and Water Authority (Dewa).
The third phase will have enough capacity to power about 200,000 homes and is expected to be completed in three years.
"Phase 3 is under construction and will be delivered in 2020," Saeed Al Tayer, the managing director and chief executive of Dewa, said at the inauguration of the 200-megawatt second phase in Dubai on Monday.
Mr Al Tayer said the solar park’s independent power producer model reduces the risks for Dewa, which is committed to meeting Dubai’s clean energy targets.
"The cost of phase 2 was US$326 million, but our investment was only $26m, with a 51 per cent holding," he said. "I think it is beneficial to our partner with an internal rate of return of between 8 and 10 per cent."
The second phase, inaugurated in the presence of Sheikh Mohammed Bin Rashid, Vice President and Ruler of Dubai, spans 4.5 square kilometres with 2.3 million solar panels, provided by First Solar. It is the cheapest operating plant in the world and can support the energy demands of 50,000 residences.
"We can actually exceed the 200MW by a little," said Abdul Al Muhaidib, the chief executive of Shuaa Energy, its owner and developer, in which Dewa has a majority stake.
"We can generate the full 200MW within two hours of sunlight."
The remaining shareholders in Shuaa Energy, Acwa Power of Saudi Arabia and partner TSK of Spain, won the contract to provide electricity at a cost of 5.84 US cents per kilowatt hour (kWh) in 2015.
"We can expect more projects to be launched at a faster pace using the public private partnership framework, using the full range of fuels including increasing levels of renewable energy," said Paddy Padmanathan, the chief executive of Acwa.
In the next few months, Dewa could potentially set a world record low cost for electricity generated from solar with the fourth phase of the park tapping a different solar technology. The 200MW concentrated solar power (CSP) plant will utilise tower technology and will also have storage capabilities unlike the previous phases.
But the ability to supply the grid when the sun is not shining also drives up the costs.
The current lowest cost for CSP technology is in Morocco at 12 cents per kWh. However, Mr Al Tayer told The National last year that he believes Dubai can achieve rates of 8 cents or lower.

Source: The National