Three key markets: #1 Jordan
The key solar markets in the MENA region today are Jordan, Egypt and Dubai. Jordans deployment of solar appears very much driven on a need for energy and it is translating into both large scale and distributed PV installations. It is one of the regions leaders on a policy front, where talk has translated into tenders for projects, and a relatively straightforward bureaucratic regime has been put in place for large project tenders and for grid connection of distributed PV.
Jordan announced with great fanfare last summer a lot of tenders and all the major players rushed to Jordan, said Browning Rockwell, the Executive Director of the Saudi Arabia Solar Industry Association and the founder of the Solar GTC Alliance. Jordan has put up a framework and put tenders out, but I think it reached an obstacle where it came down to how to finance all of these projects. It is also a small market and it will tap out fairly quickly.
Limitations in grid capacity in Jordan are presenting problems for solar rollout. Developers report that there is limited capacity for connecting large PV projects to distribution networks in the north and south of the country, and in the middle where there is sufficient grid infrastructure there is limited available land. A major high voltage line connecting the country from north to south has been proposed, but details regarding the project are limited.
Egypt shares with Jordan the need for energy and likewise has announced a large tender in which there has been a huge amount of interest from solar developers and suppliers. Unlike Jordan, the application process, administered by Egypts New and Renewable Energy Authority (NREA), is somewhat opaque and regulations still in development.
All of the major component suppliers and EPCs pv magazine spoke over the four days at WFES confirmed that they were participating in Egypts NREA tender — that is for 4.3 GW in renewable energy projects. The tender has now moved into its second stage, where the technical capacity of the applicants to execute on successful tenders will be assessed. This is expected to significantly whittle down the 67 applicants that have moved onto the second stage of the NREA tender.
Dubai appears to be moving forward with both utility scale projects, under the headline-grabbing DEWA tender, and also through its distributed solar program although regulations for the latter are yet to be put in place. Dubai certainly has the capital to put towards projects, as does neighboring Abu Dhabi, but the Gulf States also have natural gas in abundance and it is a factor that cant be ignored.
Within the region there is a case of the devil you know and a reliance on gas-fired generation because there is a lot of gas in the region, said Mohammed Atif, the area manager of DNV GLs energy advisory. In addition to that there has always been the cost issue. At the same time we are seeing [solar PV] technology mature and develop further. We are seeing yields improve and we are also seeing quite a steep fall in the cost of production on a kWh basis. Therefore I would say that the wait [for the market to open up] perhaps is not over, but it has become a lot shorter.
6 cents will make an impact
One reflection of the falling cost of solar PV has been the Dubai Electricity and Water Authoritys 200 MW tender for utility scale solar. The winning bid, from diversified energy developer ACWA Power, caught headlines within PV in the region and globally with a price of approximately US$0.06/kWh. The consequences of the low price was a matter of debate at WFES, but what was abundantly clear is that the project and price will make an impact one way or another. The founder of Bloomberg New Energy Finance Michael Liebreich was particularly bullish as to the affect the bid will have on the solar market in the region.
If you talk about the broader region including North Africa, then you have some wind, solar and CSP projects, but it hasnt really set anyones pulse racing, said Liebreich. But I think this has changed with the $0.06/kWh DEWA deal with ACWA Power because that is now the lowest cost solar globally and apparently without subsidy. ACWAs Paddy Padmanathan is absolutely insistent that this is going to be a profitable project. Around the edges [of the project] there are things like land cost, but basically that is the new benchmark now and it is in the MENA region.
Liebreichs view is not, however, a universal one and Browning Rockwell believes that it sends the wrong message to both governments in the region and also solar companies potentially looking to establish operations in the Gulf States.
I think you have to look at it as an apples and oranges bid when you look at the LCOE with which ACWA won and projects elsewhere, said Rockwell. It is a government initiated tender, the government is a partner in the deal, it is highly leveraged in terms of financing, it is very low cost financing, there is no cost for the land, it is on a site that has already been prepped for this type of construction, the company that won the bid is rushing towards an IPO, and the project is two years away! Because of these factors Rockwell says the cost structure of the project is profoundly different to those in other parts of the world and therefore misleading to developers and MENA governments alike.
Tailored solutions for the region
In two years time when the DEWA projects are built, First Solar will supply ACWA with the modules, it will have to withstand extreme heat, sand storms and dust build up — presenting a challenge for EPCs, O&M providers and component suppliers. DNV GLs Asif believes that a sense of technology risk resultant from this may have caused the regions regulators and governments to move slowly in facilitating PV rollout.
There is a technology issue in that some of these markets have very specific climate conditions. Some countries have very high humidity, dust issues, very high temperatures, so regulators have waited to see how the technology performs in these environments. Asif says he is confident that innovation within the PV industry is providing answers to the reliability questions being asked by governments and regulators in the region.
PV suppliers at the WFES displayed a strong awareness of this and presented a range of products tailored to the market. Chinese module supplier Yingli presented its CleanARC coated modules, designed specifically for MENA applications.
The anti-reflective coating (ARC) Yingli applies to its CleanARC modules was developed by Californias Enki Technology and it has reduced permeability and is more robust than some competitor coatings, which Yingli claims makes ideally suited to MENA markets.
Extensive lab and field testing demonstrates the clear advantage of multi-functional CleanARC coatings in challenging operational environments," said Kevin Kopczynski, CEO of Enki Technology.
Norwegian module supplier REC Solar showcased its new Dubai module test facility, currently under construction that it is developing in partnership with TÜV Rheinland. 130 modules of various technologies will be installed at the facility to collect crucial performance data in the unique climactic conditions in the region.
Inverter manufacturer Ingeteam also showcased its string and central inverters that have been designed to withstand the sand storms and high temperatures. Enhanced seals and oversized components are two of the technical strategies employed by Ingeteam to prevent sand getting into the inverter ad to ensure the inverters stay cool.
Global giant ABB has also developed a central inverter solution that is tailored for the MENA environment, also sporting enhanced seals to deal with hot and dusty environments. Like REC Solar ABB is establishing a test facility with the Masdar Institute, which ABBs head of the power conversion business unit Otto Preiss says will allow data on module performance to be collected, cleaning regimes optimized and the familiarity with PV by industry stakeholders in the region increased.
We have been able to put up test infrastructure with the Masdar Institute with ABB inverters and drawing on some of the expertise that we have over many GWs of installed capacity, to develop the best routines, to measure and together with TÜV Rheinland to look at what standards should look like in such a region, said Preiss.
Big players in pole position
ABB opened its first office in the MENA region in 1926 and now has a staff of 5,000 employees across all of its business activities. At its ABB headquarters in Dubai, it commissioned a 277 kW solar array in Q1 of this year. ABB hopes to demonstrate how grid stability in Dubai can be maintained with distributed solar through the project. Preiss says that the companys established roots allow it to grow its MENA solar activities within this existing framework.
We do have a solar team in the region and we try to have the team in Dubai support Egypt and Jordan, said Preiss. If we see things getting bigger then we will put more resources into the country. Having won projects in Jordan we need service people on the ground supporting projects. But it is a bit like having this hub-and-spoke approach, to deploy resources as we need them.
SunPower, through its French parent company Total, also has long had a presence in the MENA region and SunPower operates under the strong Total brand. It has installed a 1.2 MW solar array on some of the Masdar City rooftops and has supplied approximately 3,000 smaller offgrid systems to oil and gas operations in the MENA.
Just clean it
San Jose-based SunPower displayed its robotic module cleaning solution at the WFES, which it delivers as a part of its O&M service in the MENA. The cleaning robot was developed by Greenbotics, which was acquired by SunPower in November 2013 and large crowds gathered to watch the robot go to work. Ben Medder, a mechanical design engineer at SunPower, ran the demonstrations at the WFES and he says that a cleaning regime is mandatory for PV power plants in the region, particularly when it comes to high efficiency modules.
Soiling is something that accumulates over time and it is also something that can result from an event, such as a storm. It can really affect a plants performance in a short period of time, said Medder. So its crucial to be able to meet both of those challenges head one. That is something that our robots are perfectly suited for. In our plants in California, we can deploy our robots in a fleet and clean it very quickly and also a scheduled means of cleaning.
The Greenbotics robots come as standard as a part of SunPowers Oasis power plant product. The cleaning is carried out at night, with a fleet of four robots, two support stuff and one support vehicle being able to clean 12,000 solar modules over a 10-hour night shift. Water consumption minimization is important, says Medder, and SunPower claims its solution can clean more often and more water efficiently than manual cleaning. It has deployed its robots to SunPower installations to sites including the U.S. and Chile.
During the WFES Saudi Arabia announced that it was pushing back its renewable energy goals 10 years. The signal was one that is somewhat typical of the region, where market development can disappoint when compared to potential. The Saudi Arabia Solar Industry Associations Rockwell said that the region could be a very dynamic market, or a missed opportunity.
This is a market that could be a gold mine if it can be made to work, it has the money and it has the sun. It is easy [as a supplier] to get sucked into it. There can always be the perception that it is going to grow but its not for the small companies because you have to have staying power. Some of these companies that are struggling with consolidation that is going on in the industry and are looking for a quick fix — but its not going to happen here.