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Evaluating the factors that led to low-priced solar electricity projects in the Middle East

Author

Listed:
  • Harry Apostoleris

    (Khalifa University of Science and Technology)

  • Sgouris Sgouridis

    (Khalifa University of Science and Technology)

  • Marco Stefancich

    (Dubai Electricity and Water Authority)

  • Matteo Chiesa

    (Khalifa University of Science and Technology
    University of Tromsø)

Abstract

The past few years have seen the rise of large-scale, low-priced solar energy projects around the world. Oil-producing countries in the Middle East, in particularly the United Arab Emirates and Saudi Arabia, have become unexpected leaders in this movement with record-low power purchase agreement prices, below 3¢ kWh−1, for a number of new photovoltaic installations, beating the cost of fossil fuel generation. In this Analysis, we bring together technical, economic and financial information from global and local sources to study whether these prices can be replicated elsewhere and further reduced. We find that hardware costs, cost of labour, favourable cost of capital, low taxes and low, but positive, profit margins contribute to the reduction in costs. Reduced hardware prices contributed the most and also led to further reduction in cost of capital. We demonstrate how similar costs can be and have been achieved in other markets.

Suggested Citation

  • Harry Apostoleris & Sgouris Sgouridis & Marco Stefancich & Matteo Chiesa, 2018. "Evaluating the factors that led to low-priced solar electricity projects in the Middle East," Nature Energy, Nature, vol. 3(12), pages 1109-1114, December.
    • Handle: RePEc:nat:natene:v:3:y:2018:i:12:d:10.1038_s41560-018-0256-3
    DOI: 10.1038/s41560-018-0256-3
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    Cited by:

    1. Đukan, Mak & Kitzing, Lena, 2023. "A bigger bang for the buck: The impact of risk reduction on renewable energy support payments in Europe," Energy Policy, Elsevier, vol. 173(C).
    2. Li-Chen Sim, 2023. "Renewable Energy and Governance Resilience in the Gulf," Energies, MDPI, vol. 16(7), pages 1-17, April.
    3. Steffen, Bjarne, 2020. "Estimating the cost of capital for renewable energy projects," Energy Economics, Elsevier, vol. 88(C).
    4. Sgouridis, Sgouris & Ali, Mohamed & Sleptchenko, Andrei & Bouabid, Ali & Ospina, Gustavo, 2021. "Aluminum smelters in the energy transition: Optimal configuration and operation for renewable energy integration in high insolation regions," Renewable Energy, Elsevier, vol. 180(C), pages 937-953.
    5. Eikeland, Odin Foldvik & Apostoleris, Harry & Santos, Sergio & Ingebrigtsen, Karoline & Boström, Tobias & Chiesa, Matteo, 2020. "Rethinking the role of solar energy under location specific constraints," Energy, Elsevier, vol. 211(C).
    6. Chen, X.M. & Li, Y. & Zhao, B.Y. & Wang, R.Z., 2020. "Are the optimum angles of photovoltaic systems so important?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 124(C).
    7. Sebastian Krapf & Nils Kemmerzell & Syed Khawaja Haseeb Uddin & Manuel Hack Vázquez & Fabian Netzler & Markus Lienkamp, 2021. "Towards Scalable Economic Photovoltaic Potential Analysis Using Aerial Images and Deep Learning," Energies, MDPI, vol. 14(13), pages 1-22, June.
    8. Harry Apostoleris & Marco Stefancich & Matteo Chiesa, 2021. "The CPV “Toolbox”: New Approaches to Maximizing Solar Resource Utilization with Application-Oriented Concentrator Photovoltaics," Energies, MDPI, vol. 14(4), pages 1-15, February.
    9. Baloch, Ahmer A.B. & Hammat, Said & Figgis, Benjamin & Alharbi, Fahhad H. & Tabet, Nouar, 2020. "In-field characterization of key performance parameters for bifacial photovoltaic installation in a desert climate," Renewable Energy, Elsevier, vol. 159(C), pages 50-63.
    10. Timilsina, Govinda R., 2021. "Are renewable energy technologies cost competitive for electricity generation?," Renewable Energy, Elsevier, vol. 180(C), pages 658-672.
    11. Lim, Dongjun & Lee, Boreum & Lee, Hyunjun & Byun, Manhee & Lim, Hankwon, 2022. "Projected cost analysis of hybrid methanol production from tri-reforming of methane integrated with various water electrolysis systems: Technical and economic assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    12. Timilsina,Govinda R., 2020. "Demystifying the Costs of Electricity Generation Technologies," Policy Research Working Paper Series 9303, The World Bank.
    13. Lindahl, Johan & Lingfors, David & Elmqvist, Åsa & Mignon, Ingrid, 2022. "Economic analysis of the early market of centralized photovoltaic parks in Sweden," Renewable Energy, Elsevier, vol. 185(C), pages 1192-1208.
    14. Egli, Florian & Orgland, Nikolai & Taylor, Michael & Schmidt, Tobias S. & Steffen, Bjarne, 2023. "Estimating the cost of capital for solar PV projects using auction results," Energy Policy, Elsevier, vol. 183(C).
    15. Adak, Deepanjana & Bhattacharyya, Raghunath & Barshilia, Harish C., 2022. "A state-of-the-art review on the multifunctional self-cleaning nanostructured coatings for PV panels, CSP mirrors and related solar devices," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    16. Ding, H. & Zhou, D.Q. & Liu, G.Q. & Zhou, P., 2020. "Cost reduction or electricity penetration: Government R&D-induced PV development and future policy schemes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 124(C).
    17. Mohammed Bin Afif & Abdulla Bin Afif & Harry Apostoleris & Krishiv Gandhi & Anup Dadlani & Amal Al Ghaferi & Jan Torgersen & Matteo Chiesa, 2022. "Ultra-Cheap Renewable Energy as an Enabling Technology for Deep Industrial Decarbonization via Capture and Utilization of Process CO 2 Emissions," Energies, MDPI, vol. 15(14), pages 1-15, July.

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