Abu Dhabi has set a global record-low solar price as authorities confirmed the winning bid in a 2-gigawatt tender. Upon its expected completion in mid-2022, it is slated to be the largest single-site solar energy project in the world.

The Al Dhafra project had five bidders, with the lowest offer coming in at 1.35 U.S. cents per kilowatt-hour.

The state-run Abu Dhabi Power Corporation (ADPower) confirmed to GTM that the leading consortium consists of French energy giant EDF and the projects division of Chinese solar manufacturer Jinko Solar.

ADPower will now negotiate a 30-year power-purchase agreement with EDF/Jinko. If an agreement cannot be reached, ADPower, part of the Emirates Water and Electricity Company, can negotiate with the second-best bidder.

EDF declined to comment when contacted by GTM.

French utility Engie, Japan’s Softbank and Saudi Arabia’s ACWA Power, which has won a string of large projects in the region, were among the final five shortlisted bidders.

Why solar prices are so low in the Middle East

The Gulf states have had more than their share of record-low solar prices of late. 

In November, Abu Dhabi’s neighboring emirate Dubai claimed the title with a 1.7 U.S. cents deal with ACWA Power for the next 900 megawatts of its Sheikh Mohammed bin Rashid al Maktoum Solar Park. The facility started in 2013 with 13 megawatts of First Solar panels and is working its way up to a targeted 5 gigawatts by 2030.

Then in January, Qatar went even lower with a bid of 1.6 cents per kilowatt-hour. That project was won by French oil firm Total and Japanese conglomerate Marubeni.

Now, three months later, the record looks set to pass back to the United Arab Emirates. 

Tenders in the Middle East and North Africa region usually see the state take majority ownership of the project. In the case of Al Dhafra, the winners will keep a 40 percent stake and receive a 30-year PPA contract that includes, construction, procurement, and operations and maintenance duties.

There are numerous factors behind the ever-lower prices for solar in the Middle East, including great solar resources, large and flat sites, cheap-to-zero land costs, massive scale, and the cheap finance that comes with a 30-year PPA with a petrostate as the offtaker.

Both JinkoSolar and EDF have strong track records in the United Arab Emirates. Jinko developed the 1.2-gigawatt Noor Abu Dhabi project in partnership with Marubeni, which came online last year.

EDF has teamed up with UAE energy company and investor Masdar on a variety of projects, from solar thermal deployment in North Africa to an energy services company serving the whole region.

Big orders for the coronavirus-hit solar sector

So far, large solar tenders in the Middle East have motored on despite the current crises hitting the energy sector. Saudi Arabia is currently holding a 1.2-gigawatt solar energy tender of its own. First Solar, ACWA Power, Jinko, EDF and Marubeni are among the participants (PDF).

For module suppliers, such monster deals can fill a significant hole in their order books. The global module market is moving toward an oversupply situation, as Chinese factories ramp back up even as many key markets remain in lockdown. 

A recent survey of inverter and module manufacturers by the Global Solar Council found that 40 percent of companies queried had seen orders fall 50 to 100 percent compared to last year due to COVID-19.