Abu Dhabi Future Energy Company (Masdar) bid for 300MW capacity at SAR0.0669736/kWh (US$1.786 cents). Flickr: Freestock

UPDATED: Saudi Arabia’s 300MW solar tender has seen opening bids go lower than two US cents, setting the tone for a new global solar power tariff record if awarded.

Abu Dhabi Future Energy Company (Masdar) bid for 300MW capacity at SAR0.0669736/kWh (US$1.786 cents).

During a webinar showing the bid opening ceremony, Saudi Arabia’s new Renewable Energy Project Development Office (REPDO) revealed the eight companies that had made it through to this stage, having had 27 companies shortlisted originally in April.

REPDO then announced that these bids will be evaluated for compliance with the requirements of the RfP and a final shortlist of bidders will be announced on 28 November. The project will be awarded to the winning consortium on 27 January 2018, backed by a 25-year power purchase agreement (PPA). The financial closing date will be 28 February 2018 and the commissioning date is expected during 2019.

In April, analysis firm GTM Research forecast that this tender, for capacity located at Sakaka in Northern Saudi Arabia, was the most likely contender for solar to break 2 US cents in 2017.

The bidders and the capacity, LCOE and completion dates were as follows.

Developer completion date (2019) nominal capacity on commercial opening date (MW) LCOE (halalah/kWh) LCOE (~US$ cents /kWh) Abu Dhabi Future Energy Company (Masdar) 7 June 300 6.69736 1.78567 Acwa Power 31 March 300 8.7815 2.342 Marubeni Corporation 14 April 310 9.976 2.66 Engie 12 July 381 10.393 2.77 JGC Corporation 30 April 355 10.44139 2.784 Mitsui & Co. N/A 300 10.71 2.856 Total 2 May 300 10.72174 2.859 Cobra 30 April 300 12.62521 3.366

Back in April, Ben Attia, research associate at GTM Research, said: "Similar to the conditions that brought record low bids in Sweihan, namely a long project timeline, an escalating or split tariff, near-zero land cost, permitting costs, taxes, and most significantly, highly-attractive financing terms, the first Saudi tender could create a perfect storm for another record-setting bid that could dip below two cents."

Khalid Al Falih, Minister of Energy, Industry and Mineral Resources, said: “Today’s bid opening represents a significant milestone for the NREP, and an important step on the way to diversifying Saudi Arabia’s domestic energy mix and building a cutting-edge domestic renewable energy sector, which will create new jobs and opportunities. The commercial viability of utility-scale solar energy projects is a corner stone of the program and the bids opened today will set the benchmark for this burgeoning new industry in the Kingdom and beyond."

Article revised to note that this was a single opening bidding stage. Project will be awarded after checking for compliance with no final auction.