Dubai Switches on First Solar Plant to Diversify Energy Mix

Dubai switched on its first solar plant and plans to build a second, bigger sun-powered one to diversify energy supply in the United Arab Emirates, an OPEC member with 6 percent of global oil reserves.

The new 13-megawatt photovoltaic plant is the largest of its type in the Middle East and North Africa, the head of Dubai’s state utility said today at an inauguration in a desert near the Persian Gulf coast. First Solar Inc. (FSLR), the biggest U.S. solar-panel manufacturer, built the facility, which cost 120 million to 130 million dirhams ($33 million to $35 million), according to officials.

“This is the first part of Dubai’s plan to develop a solar park with 1,000 megawatts of power by 2030,” said Saeed Al Tayer, chief executive officer of Dubai Electricity & Water Authority. DEWA plans to invite bids in six months for a private partner in its next solar project, a 100-megawatt plant in which it will hold a 51 percent stake, he said.

The government-owned utility is seeking to reduce its use of natural gas as a fuel for power stations while also boosting generating capacity to meet a 5 percent annual growth in electricity demand in Dubai, the U.A.E.’s second-largest sheikhdom. DEWA expects to complete its second solar plant in three years as the company expands further into renewable energy, Al Tayer said.

Bank Finance

The planned 100-megawatt facility will cost 700 million to 800 million dirhams, Waleed Salman, DEWA’s executive vice president for strategy and business development, said at the ceremony. The utility may borrow some of the money from banks, he said.

Dubai is targeting by 2030 to generate 5 percent of its electricity from renewable energy and 12 percent from coal, while buying an additional 12 percent of its power from nuclear reactors planned in neighboring Abu Dhabi. The remaining 71 percent will come from gas, according to a 2011 plan.

The U.A.E. is the fourth-largest oil producer in the Organization of Petroleum Exporting Countries, with Abu Dhabi holding most of its crude reserves.

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