
Bids in 300MW Saudi solar tender breach two cents - zeristor
https://www.pv-tech.org/news/technical-bids-for-300mw-of-solar-in-saudi-arabia-already-breach-2-cents
======
philipkglass
Some more background here:
[https://www.greentechmedia.com/articles/read/saudi-solar-
bid...](https://www.greentechmedia.com/articles/read/saudi-solar-bid-makes-
solar-cheapest-electricity-in-world)

PV has become a lot cheaper in recent years, and Saudi Arabia has plenty of
sun, but these bids are so low that they may require behind-the-scenes
support. Or they might not come to fruition. India has recently had similar
problems where bidders tried to guess how fast hardware costs would continue
to fall when bidding on future projects, and guessed too optimistically.

[https://www.greentechmedia.com/articles/read/indias-
renewabl...](https://www.greentechmedia.com/articles/read/indias-renewable-
energy-auctions-may-not-be-sustainable)

~~~
thinkling
> these bids are so low that they may require behind-the-scenes support

I thought the gap between the lowest and next-lowest gap was interesting:
$0.01786 vs $0.02342. Made me wonder what the lowest bidder's advantage is.

~~~
seb1204
Having worked on 2 multi billion dollar projects in Saudi and UAE the price
the bids are in very rarely is the final total cost of a contract or purchase
order. Ongoing changes, corrections, under preforming suppliers that have
underestimated the complexities and cost are always present. The client will
need to come up with ways to pay these additional cost if he does not want to
sit on a half built plant. It is not uncommon that contractors go bust under
this price pressure and another one with a more realistic cost will come in to
save the day. Problems like this often involve Saudi or UAE government or
royalty as the risk of loosing face is hight. Things then get smoothed over
with a cup of tea behind closed doors.

~~~
sandworm101
Those same officials who will smooth over the future problems are happy with
the press today. SA is coming off today as a herald of the green future.
That's good press regardless of eventual outcomes.

(Remember also that SA is currently involved in a messy war against a
neighbour. We must assume that any and all news is being carefully managed.)

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slagfart
Sorry - I must be missing something.

300 MW = 300,000 kW

6 hours of generating capacity per day, 365 days in the year, gives 2190 hours
of generation per year. 2,190 hours * 300,000kW * 0.02USD gives an annual cost
to Saudi Arabia of $13.14M a year, for 300MW of installed capacity.

A modern panel is around 250W, so they are installing and running 1.2M panels,
for ~$11/year per panel, including grid connection and transformation costs?
Insane!

~~~
Iv
The wonders one can achieve in a country that still uses slaves...

~~~
rxhernandez
Is the United States doing this? I know we have literal slavery in prisons.

~~~
QAPereo
No, they just make things for the military and general consumption, nothing
truly useful.

~~~
glenneroo
Here is a long list of companies that sell products made by taxpayer funded
prison labor: [http://buycott.com/campaign/companies/504/boycott-
companies-...](http://buycott.com/campaign/companies/504/boycott-companies-
that-use-prison-labor)

------
zeristor
One use of cheap power is to do very energy intensive operations. Egypt
powered fertiliser plants from the Aswan dam, and Iceland uses hydropower to
smelt aluminium.

Saudi Arabia is building a huge aluminium smelter, I had thought it would be
solar powered, but they would need far, far more power, and of course it
couldn't run at night.

[http://www.bechtel.com/projects/ras-al-khair-aluminum-
smelte...](http://www.bechtel.com/projects/ras-al-khair-aluminum-smelter/)

So I assume this is gas fired power, which seems strange.

~~~
bamboozled
It's interesting that we don't favour the idea of something only running in
the day when transitioning to renewables. Would it be such a bad thing and
would there be other operations they could happen during the night ?

I know it might mean less money or whatever, but the universe doesn't seem to
run on money so it's weird logic sacrifice the environment over something like
operational uptime.

~~~
philipkglass
There are some processes where equipment lifetime is more determined by total
usage than by start-stop cycles. Those processes can more or less seamlessly
transition to intermittent renewables _as long as_ the time value of money
isn't very high. Given persistently low inflation rates despite years of QE, I
think we might be there already. EDIT: actually, even if the _processes_ are
tolerant of frequent stop-start, the associated _labor scheduling_ may not be.
Not knowing when you'll have a shift scheduled sucks for workers. Not knowing
if your regularly-scheduled workers will have favorable weather to do useful
work when they show up at the plant would suck for employers.

Other processes are intolerant of complete shutdown/startup cycles. Modern
aluminum smelting is one of them. If everything freezes up in the production
cells because of too little power for too long, it causes damage and it takes
a long time to start up again. To make aluminum smelting more cycling-tolerant
would require rethinking the whole plant design. Even then the cost savings
from cheap but non-dispatchable renewables may not be enough to compete with
existing plants powered with dispatchable electricity.

~~~
xyzzyz
> Not knowing when you'll have a shift scheduled sucks for workers. Not
> knowing if your regularly-scheduled workers will have favorable weather to
> do useful work when they show up at the plant would suck for employers.

I'm not sure if this is such a huge problem. Modern operations require very
few human operators, and they do not contribute too much to the actual costs.
Worst thing is that you'll just have some people doing nothing waiting for
cheaper energy.

> If everything freezes up in the production cells because of too little power
> for too long, it causes damage and it takes a long time to start up again.

It takes much less power to keep the aluminum hot than it takes to smelt it,
so if power becomes too expensive for smelting, you just use a fraction of it
to keep it hot in the cells.

------
woodandsteel
It is quite telling that this solar project is taking place in Saudi Arabia,
the worlds most profitable producer of fossil fuels. You know, the fossil fuel
companies all see where things are going. It is only American conservatives
who are in deep denial.

~~~
kogepathic
_> It is quite telling that this solar project is taking place in Saudi
Arabia, the worlds most profitable producer of fossil fuels._

Is it? I always thought of it as smart planning. They are taking the profits
from a limited resource and diversifying.

Norway has been doing this for decades, albeit not directly with PV.

~~~
woodandsteel
In my comment I am agreeing with you, it's smart planning. The fact that
renewables are going to replace fossil fuels is so obvious that even fossil
fuel producers, who you would expect to deny it, are instead acknowledging it.

------
peteretep

        > US$1.786 cents
    

There's got to be a better way of writing that

~~~
dragonwriter
Since that's just flat out wrong, yes. It's either $0.01786 or 1.786¢ (if you
need to specify the US, then definitely the first with either “USD” or “US $”
in place of the plain “$”.)

~~~
Faaak
It would be more logical to to put units at the end, as the SI norms say.

eg: USD 24k is a bit stupid, whereas 24 kUSD is more clear. It's even worse
with things like 1/(USD 800/kWp) which gives things like:.8kWp/USD 1 ?

------
vkou
How much of this is due to the near-slave working conditions and compensation
that imported manual laborers in Saudi Arabia have to deal with?

~~~
philipkglass
Not much. Even in the relatively high-labor-cost United States, only 12% of
utility scale solar project costs are attributable to installation labor. See
table 14 on page 56 of this report:

[https://www.nrel.gov/docs/fy17osti/68925.pdf](https://www.nrel.gov/docs/fy17osti/68925.pdf)

~~~
selimthegrim
Thanks for this, I didn't know it had fallen so fast!

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r00fus
I can imagine that if proof-of-work remains a prevailing feature of popular
blockchain systems, setting up e.g. bitcoin mining operation off near-free
solar would be a nice passive income stream.

How fast can modern ASIC hardware pay for itself if mining?

~~~
zeusk
I already operate a small scale operation near my hometown in India which is
_almost_ self sufficient (powered by wind and solar). For deficit, we have
connection to the grid but it is rarely used save for rainy season.

~~~
nebula
Very interesting. Can you please provide more details on your setup. I would
love to know more as I am interested in doing something similar.

------
jlebrech
the less fossil fuel they use themselves, the more they can sell.

