Shams I gets out of the blocks
Contract for world's largest concentrated solar power plant awarded.
Masdar, the state-owned renewable energy initiative, on Wednesday revealed Total and Abengoa as the winning consortium to build, own and operate the world’s largest concentrated solar plant in Abu Dhabi.
The 100MW Shams I independent power plant (IPP) comes at a cost US$600 million, and will be operational by the third quarter of 2012. Construction is to begin within the next three months. The plant will be majority owned by Masdar, who will hold a 60 percent stake in the project, with Abengoa and Total holding a 20 percent stake each.
The plant will consist of 768 parabolic trough collectors, to be supplied by Abengoa, stretching over an area of 2.5 square kilometers. It will displace approximately 175,000 tonnes of CO2 per year, equivalent to planting 1.5 million trees or removing 15,000 cars from Abu Dhabi’s roads. The Shams I will be located 120 km from Abu Dhabi in Madinat Zayed, which is to become the location of future solar projects.
The project is part of Abu Dhabi’s efforts to produce seven percent of its electricity from renewable sources by 2020.
“Shams I is one of the projects we are hoping to develop in the coming years to meet this target,” said Dr Sultan Al Jaber, CEO of Masdar, at the press conference announcing the deal. “Shams I will allow Masdar to transfer to Abu Dhabi the know-how and expertise we have gained from our involvement in developing world-class renewable energy projects abroad, thus not only opening the door for renewable energy projects in the UAE but also for technology transfer. [...] Shams I will help us lower the costs of future projects.”
Al Jaber also confirmed that the owners will tap the credit market to finance the projects, while saying that no borrowing has of yet taken place.
While Al Jaber would not reveal any details about further renewable projects, he said that solar power would be the main source of renewable power.
The Shams I project is accompanied by the introduction of a ‘green tariff’, by which the government compensates ADWEC, the Abu Dhabi Water and Electricity Company, for the extra cost involved in producing energy from solar, said Nick Carter, director general of the Abu Dhabi Regulation & Supervision Bureau. This is the first government initiative to promote the use of renewable energy through subsidies, and comes close to the feed-in tariffs applied in countries around the world.
Carter refused to reveal the financial details of the tariff, but said the model will be applied to other renewable projects. “The cost per unit will come down – and might reach a point where we won’t need a green pricing mechanism,” he added.
Renewables are part of the energy mix developed to satiate rising demand. In 2009, consumption in Abu Dhabi increased by 11 percent, and by 16 percent if exports to the rest of the UAE are included, said Carter.