With little remaining hydrocarbon resources, Dubai needs to look for alternative sources of energy for power generation in the future. Last year, the emirate’s Supreme Council of Energy outlined plans to utilise new sources of energy, such as clean coal, and nuclear and solar power by 2030.

Although natural gas will continue to dominate, accounting for 71 per cent of total power generation, these new sources of energy will become more important. Clean coal and nulcear power are expected to account for 12 per cent of the energy mix each, followed by solar power, which is forecast to provide 5 per cent of the energy required for power generation.

This is an ambitious target, particularly as a nuclear power station would require a huge capital injection from the outset and coal-fired projects would require extensive fuel transportation infrastructure. In terms of solar power, Dubai’s 5 per cent target will be challenging, but not impossible.

According to studies undertaken in Dubai, available global irradiation usable by photovoltaic solar technology is 2,105kWh a square metre (kWh/sq m) and direct normal irradiance is roughly 2,061 kWh/sq m.

Even factoring in dust, haze and overheating factors, Dubai is an attractive location for solar power. As a result, Dubai’s Supreme Council of Energy has launched a landmark 1,000MW solar park at Seih al-Dahal.

Dubai Electricity and Water Authority (Dewa) has said the programme is likely to cost about AED12bn ($3.5bn), based on current prices for solar power plants. It will start with a modest 10MW photovoltaic solar project, which it expects to cost AED120m. Subsequent projects are to be developed by the private sector using independent power project (IPP) models, among others.

At current prices, the total cost may have been underestimated. Abu Dhabi’s most recent solar power project, Shams 1, is currently under construction and will use concentrated solar power (CSP) technology. Having closed financing less than a year ago in the neighbouring emirate, the $768m project gives an indication of the costs of a 100MW project financed solar power project. On this basis, Dewa will need to spend much more than $3.5bn.

Nevertheless, global solar power prices are firmly set on a downward trend. In the 1970s, solar power panels cost about 100 times more than current prices. The decline in the cost of photovoltaic solar over the past two years has been instrumental in convincing governments that solar is becoming a financially viable alternative.

Over the next five years, factory gate module prices are projected to drop between 37 and 50 per cent. As a result, solar power in the region could reach grid parity within the next 2-4 years, once subsidies for traditional power generation are factored out of the equation.

Dubai still faces a large challenge to meet its solar power targets, but if it can convince the private sector to invest, it will achieve its aims. The most efficient way of doing this would be to introduce a feed-in tariff. Dewa has said it is considering this option. However, many countries in the region have said the same and none have implemented such legislation yet.