Four international companies have been awarded 50MW solar PV projects under Jordan’s Round 2 solar PPA tender, with industry bodies hoping the results will help the Middle East solar market take off.
While 33 companies submitted proposals, only 24 put forward financial bids.
On average the top four tariffs dropped 50% lower than the tariff from the Round 1 tender, which reflects a significant lowering in the cost of solar in the country.
The winning tariff is within 10% of the tariff for the Dubai Electricity and Water Authority (DEWA) 200MW IPP project from the first round of tenders, thought to be the lowest ever, according to the Middle East Solar Industry Association (MESIA).
Vahid Fotuhi, MESIA president and founder, said the results suggest a tariff of 6-8 US$ cents is the new benchmark for utility-scale solar projects in the stable markets within the Middle East.
He added: “This means that solar is now cheaper than natural gas for power generation.”
In Round 2, Greek company GI Karnomourakis SunRise were the surprise lowest bidders, given that their current portfolio of projects is only in Greece and they have never built this scale of project.
MESIA said that another top four bidder, Middle East-based Fotowatio/ALJ, can be “extremely aggressive” on large-scale solar IPPs due to strong financial backing from Saudi Arabia's Abdul Latif Jamil (ALJ) and strong IPP experience from Fotowatio. Saudi Oger, another Saudi-based company, also finished in the top four and MESIA forecast that both Saudi companies will be leading solar players in the future.
Fotuhi said home-grown mid-cap Jordanian developers also did well, with Evolution Solar and Philidelphia Solar finishing fifth and sixth, well ahead of many of the established players such as Mainstream, SunEdison, Acwa Power, and ELF-ENEL.
He added that the market was surprised that Saudi power engineering firm ACWA Power did not provide the lowest bid.
A statement from MESIA said: “The results in Jordan will send a strong signal to other solar markets, notably Saudi Arabia, who are sitting on the sidelines of the region's solar market.
“Riyadh can now see that solar is extremely competitive compared to conventional sources of power generation. If they decide to follow in Amman's footsteps, we will see the Middle East solar market take off like never before.”
|Round 2 Bidders||Bid in JOD, cents per kWh||Bid in US$, cents per kWh|
|GI Karnomourakis SunRise PV Systems||4.3441||6.13|
|Hareon Swiss Holding||5.43||7.67|
|Alten Renewable Energy Developments||6.275||8.86|
|Al Sanad for Renewable Energy (JoSolars)||6.299||8.89|
|Spectrum International for Investment||7.3||10.31|
|Suncore PV Technology||9.4||13.27|
The Round 2 awards come as welcome news after Jordan’s Ministry of Energy and Mineral Resources cancelled a procurement round for four 100MW wind and solar projects in August 2014 citing too much stress on the country's grid.