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posted by martyb on Thursday October 11 2018, @11:59AM   Printer-friendly
from the Betteridge-says-"No" dept.

Arthur T Knackerbracket has found the following story:

In recent years, massive solar projects proposed for the Middle East have grabbed headlines with extremely low prices. Developers have announced agreements to sell their solar energy for as low as 2.34¢ per kilowatt-hour (kWh)—lower than the US' lowest prices and much lower than the average 6¢ per kilowatt-hour that the US lauded last September.

What they learned was that the numbers posted in four of the most recent Middle East solar projects were likely real, with some reasonable help from favorable government policies. Still, the numbers seem real for the region; not all cost reductions are likely to transfer to other parts of the world.

[...] The researchers primarily looked at four solar installations and their accompanying Power Purchase Agreements (PPAs). While most solar developers might not disclose what it actually costs to buy, install, and connect a solar energy plant, the PPA can be used to reverse-engineer what the costs to install a project are—in some cases. If there are significant hidden subsidies or the developer doesn't care that a PPA price is below cost, then the PPA doesn't tell us a lot.

Two of the four solar installations that the researchers looked at are located at Mohammed Bin Rashid al Maktoum Solar Park (MBR Solar Park). Phase II of the MBR Solar Park is a 200MW installation that was announced in 2015 and secured a PPA for 5.84¢ per kWh. Phase III, announced in June 2017, will add another 800MW to the park and will sell its electricity for 2.99¢ per kWh. Additionally, a May 2017 project in Abu Dhabi called Sweihan will build out 1,177MW and sell that electricity for 2.94¢ per kWh. Finally, Sakaka solar park in Northern Saudi Arabia was announced in March 2018 with a PPA price of 2.34¢ per kWh.

The researchers' paper, published this week in Nature, shows that five things caused these low prices. First, the cost of solar panels has obviously been tumbling, especially after the Chinese government recently cancelled a subsidy program for solar panels in that country, causing demand in China to drop.

The cost of labor is another factor. "With local contractors assuming most construction duties, and reported wages for construction work and even some skilled trades reported as less than US $5 by local sources, we believe that a reduction in labor costs of 50 percent relative to the US benchmark is a reasonable and perhaps even a conservative estimate," the researchers write. That's not necessarily something other countries should want to replicate: well-paying construction jobs are part and parcel of the benefit of solar energy.

The other three factors that lead to extremely low solar prices in the Middle East are easy financing on low interest rates, low taxes, and "low, but positive, profit margins," the researchers write. None of those factors are guaranteed for solar projects in other parts of the world, but creating an environment where all three exist is not a possibility exclusive to the Middle East.

-- submitted from IRC


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  • (Score: 0, Troll) by realDonaldTrump on Thursday October 11 2018, @01:10PM (1 child)

    by realDonaldTrump (6614) on Thursday October 11 2018, @01:10PM (#747406) Homepage Journal

    And I don't know if it's $5 a day. Or $5 a week. Look, our wonderful prisoners work for much less than that. If we wanted to do Solar, we could do it VERY CHEAPLY. We don't want to -- we want our Country to be SAFE. And we want our Energy Grid to be there for us all the time. 100%. If there's a hurricane, if there's tornadoes, if there's earthquakes & big waves (Indonesia) -- we want our POWER. So we want beautiful Clean Coal. And beautiful Clean Nuclear. So we can have electric around the clock. Night and day -- and day after day. For MONTHS at a time. You don't get that with solar, believe me. Solar goes out every night for HOURS and you don't know what it's doing or when it's coming back. Totally unacceptable! No more Puerto Ricos!!

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  • (Score: 3, Interesting) by RS3 on Thursday October 11 2018, @01:36PM

    by RS3 (6367) on Thursday October 11 2018, @01:36PM (#747417)

    Then put your $ where your mouth is and bury the wires. Do it well, for the long-haul. Your coal plant's power can't get to society when the wires go down in storms.

    For the record, I vote for as much solar and wind as possible with energy storage (PowerWall, etc.) in homes and larger installations.