Saudi Arabia Gets Cheapest Bids for Solar Power in Auction

Bloomberg reports that this is the start of a $50bn program to diversify the oil producer’s domestic energy supplies away from fossil fuels.

It says:

“The energy ministry said Abu Dhabi’s Masdar and Electricite de France SA bid to supply power from a 300MW photovoltaic plant for as little as 6.69736 halalas a kilowatt hour, or 1.79 US cents, according to a webcast of the bid-opening ceremony on Tuesday in Riyadh. If awarded, that would beat the previous record for a solar project in Abu Dhabi for 2.42 US cents a kilowatt-hour.”

Bloomberg carries the views of Jenny Chase, chief solar analyst for BNEF in Zurich:

“There is great pressure in the Middle East to come up with an impressive headline number, and these are becoming increasingly divorced from the reality of payments … I don’t think this is possible as an all-in price of electricity from a 2019 PV project, particularly given the rising cost of debt in Saudi Arabia.”

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