MESIA: 350 MW ADWEA tender unlikely to lead to "race-to-the-bottom" pricing

The 350 MW project in Sweihan, Abu Dhabi, will be one of the largest PV power plants globally once completed and will be a landmark installation in the region. ADWEA has produced a tender shortlist, from over 90 applicants, with eight companies identified as being suitable to execute the project in their current form and can submit a final bid immediately.

The successful bidder will own up to 40% of the vast project, with ADWEA retaining the remaining 60%. Given the size of the project, ADWEA is encouraging consortiums to be formed between companies with the financial resources and those with the technical know-how to execute the PV power plant.

Reporting from The National reveals that the eight bidders selected to submit applications in their own right include Italy’s Enel, EDF Energies Nouvelles and First Solar.

Of the remaining 34 bidders, they have been divided into two groups, with members of one group encouraged to work with those from the second. Of these two groups, there are 19 companies, as detailed in a tender shortlist obtained by The National, in the first including JinkoSolar, China State Construction Engineering, and Chinese wind giant Golden Concord Holdings. The second group includes ACWA Power and Masdar. These companies have 28 days to do this and can then submit a final bid.

Hadi Tahboub, the Vice President of the Middle East Solar Industry Association (MESIA) told pv magazine that ADWEA has a great deal of experience in managing large IPP tenders, and will likely strike a balance between a low bid price, technical capability of the bidder and the ability to deliver the project on time.

Given the low prices achieved by successful bidders in projects elsewhere in the Gulf Region, the ADWEA bids are likely to be aggressive, but Tahboub said fears of a ‘race-to-the-bottom’ and unrealistic prices are unwarranted.

"The solar industry is holding its breath because Abu Dhabi always entertains projects with the best value for money," said Tahboub. "With Abu Dhabi’s history, tender results were not always given to the lowest bidder. The ADWEA family of companies is always looking for a unique offering, besides price. So it will select the model that best suits Abu Dhabi’s growing economy."

Very low bid prices have plagued the development of the PV industry in India, with industry commentators noting that a number of the very low bids will be difficult if not impossible to finance.

The ADWEA project is to be located around 150km from the city of Abu Dhabi, in the Sweihan region. MESIA’s Tahboub said that it is an area in which urban development is taking place driving increasing electricity demand. This urban growth is likely to spur ongoing demand for PV projects.

"Abu Dhabi’s urban development is expanding horizontally, so there are always new areas requiring electricity supply," Tahboub said.