By Jason Deign

Things are moving quickly in the Middle East.

Previously CSP Today reported how Kuwait has opened the bidding process for 50MW of solar thermal within its proposed 70MW Shagaya Multi Technology Renewable Energy Power Park.

The move, which will see CSP taking centre stage alongside just 10MW of PV and 10MW of wind power, clearly positions Kuwait as a potentially important new market for solar thermal developers.

The country currently relies on precious oil reserves for 70% of its power, so has a real incentive to switch to CSP. The fact that the Shagaya complex will include 10 hours of thermal storage indicates that Kuwaiti regulators are likely eyeing CSP for base-load generation.

Of course, Kuwait’s plans are small change compared to Saudi Arabia’s aim to install 25GW of CSP. But it all adds up to make the Middle East an increasingly interesting region for the industry. After all, Saudi Arabia and Kuwait are far from the only countries considering CSP.

According to Firas Rimawi, adviser to the chief executive at the South Company for Construction and Development in Jordan, Abengoa and Mitsubishi Corporation Jordan have both submitted bids for CSP plants in the country.

Back in 2009 a compact linear Fresnel plant, JOAN1, was announced in Jordan, but the project has yet to materialise. The recent bids, which have a cut-off point of March 2014, fall within a government programme to install 600MW of solar power (and 1,200MW of wind) by 2020.

A dozen early bids for solar have all gone to PV after developers identified it as offering greater margins within the state tariff scheme. This sets a feed-in tariff (FiT) of JOD0.12 (about USD$0.17) per kilowatt-hour for PV and JOD0.135 (about $0.19) for CSP.

Further projects

Provided CSP developers can bring plant costs down enough to make a margin on the FiT, there appears to be ample room for further projects, since the administration is adopting a largely technology-agnostic approach to solar power, Rimawi says.

Given the lead times involved in CSP plant planning, design and construction, he expects the Jordanian market to start picking up from around 2016. And foreign CSP players could have a distinct advantage.

“One of the conditions the ministry has put to accept any proposal is that the developers should have made projects of such sizes before, so they have technical experience,” Rimawi observes.

“None of the Jordanian companies have ever implemented major-sized projects before. My belief is that all companies that have submitted bids are international companies or local companies in consortium with international companies.”

Bloomberg New Energy Finance analyst Logan Goldie-Scot agrees the development of solar industries in Jordan will be heavily dependent on outside help for technical issues such as the awarding of power-purchase agreements (PPAs).

“There’s not a huge amount of resource dedicated to renewable energy, in terms of the number of people within the government and within the utility, that are able to sign PPAs with confidence and secure the finances,” he says.

As a result, many insiders are awaiting the outcome of an International Finance Corporation funding package for wind in order to use it as a model for further projects, Goldie-Scot believes.
“It’s been interesting,” he notes.

Development pipeline

“Jordan is expecting bids to move forward by the end of this year, beginning of next year” says Goldie-Scot.

Elsewhere, the Middle East region encompasses potential markets such as Israel, where PV has taken off in a big way and there is a significant pool of home-grown CSP expertise, and Turkey, which recently inaugurated its first solar thermal plant in Mersin.

Local energy company Greenway built the 5MW plant with $50 million in funding from the Scientific and Technological Research Council of Turkey (Tübitak) and the Technology Development Foundation of Turkey.

The country has at least one pioneering CSP developer in the shape of Hittite Solar Energy, which is marketing a direct steam generation parabolic trough design.

And it is already emerging as a major market for other renewable energy sources, such as wind, which bodes well for future CSP prospects.

Alongside countries such as Egypt, which is moving forward with the 100MW Kom Ombo parabolic trough project, and the United Arab Emirates, home to the record-breaking Shams 1 plant, the picture that emerges in the Middle East is of a region studded with CSP opportunities.

To respond to this article, please write to Jason Deign

Or contact the editor, Jennifer Muirhead