With greater energy demands globally, driving down the cost of producing electricity becomes an imperative. Coupled with a strong push to combat climate change, worldwide people have turned to renewable energy as the solution to the current energy challenges that the world faces. But, are renewable energy solutions a realistic and affordable alternative to traditional energy supplies?
According to solar energy developer Paschal Phelan, owner of the Phelan Energy Group and its subsidiary Solar Capital, solar power developers are competing to break world records to drive down the cost of solar power solutions.
Phelan explains that in a recent tender submission for the Abu Dhabi Water and Electricity Authority (ADWEA) PV project, three of the bids submitted broke the previous world record for the lowest solar tariff in the world – of which the Phelan Tenaga Consortium bid, led by the Phelan Energy Group, was one.
ADWEA’s PV project is planned to be the largest international PV solar facility on the planet, and at a cost of ca. US$700m, is already considered one of the world’s most significant achievements in renewable energy.
Phelan says that the lowest Weighted Levelised Electricity Cost (WLEC) was 2.42 US cents per kWh for a proposed 1,170 MW PV facility, with the Phelan Tenaga bid coming close to this at 2.598 US cents per kWh.
He points out that the Phelan Tenaga bid was more than 10% lower than the previous record for lowest tariff for a large scale plant, currently being built in Dubai. “More importantly Phelan Tenaga and two other groups are the only solar energy developers ever to bid below 2.9 US cents per kWh.”
Phelan further clarified that prices will vary between regions depending on solar irradiation, local content, building costs, cost of funding and foreign exchange.
Phelan says that the Phelan Energy Group has been at the forefront of solar innovation since the company’s inception ten years ago, with its vision to be the world’s lowest cost producer of solar energy. “We have already successfully delivered large scale solar plants, in excess of 175 MW in South Africa, in the very similar desert conditions.”
He adds that solar power is cheaper, safer and quicker with no ongoing carbon footprint. “It is the energy of now and the future. Fossil fuels in regions of reasonable sunshine should have taken the trail of the dinosaurs.”
Phelan explains that the arrival of low cost solar power has taken many governments by surprise. “With the enacting of carbon tax legislation under their COP commitments, however, they will soon realise that solar energy is the future. The cost of battery storage for solar energy is on a similar downward trajectory and is now market competitive.”
The Phelan Energy Group formed a consortium for the Abu Dhabi tender with Tenaga Nasional Berhad, the Malaysian energy utility company that is a leader in generation and distribution with more than 10,000 MW of total installed capacity.
ADWEA is currently conducting due diligence of the three Preferred Consortia submissions and will announce the winning bid/s in November 2016.