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Provider of solar power system solutions, Yellow Door caters to solar industry from sizing, design to installation of the right system, besides also making the capital investment to build it
Speaking with Technical Review Middle East, CEO Jeremy Crane entails on the projects and ideas that Yellow Door is unique about.
Backing one of the largest solar IPP companies in the Middle East region, Adenium Energy Capital, Crane says that the company largely specifically focuses on renewable energy projects, large scale utility connected projects.
“Yellow Door recognises that there is a new industry that could be serviced, which is distributed generation. In the power generation market that is serviced via gensets, we believe that local power generation can be more economical through solar power than through other sources and we can do that in the form of a utility. Yellow Door is a solar utility where it sells kilowatt hours from solar installation to a consumer on their site.
“We are the largest builder of solar projects in Jordan today and we are targeting 57MW to be online in the country by Q2 this year. We’ve got bunch of projects in Italy and Japan too.”
In Jordan, Yellow Door is working with Balqa University. The university has 12 campuses around the country and a 5MW plant that will be installed there is going to service all of those campuses through a ‘wheeling’ scenario. This means interconnection with transmission lines in one place and then the university pays for that power to be distributed to each of the campuses. This way, the client saves 40 per cent cost of power.
Yellow Door is also into solar leasing. A fairly new concept, Crane explains, “The essence of our business is providing lower cost power alternatives to the grid. The legal structure for that can be through different things. We are often restricted from actually selling kilowatt hours through a standard power purchase agreement (PPA). So, instead of that we lease the equipment on a performance basis to customers. So, if a factory owner in Jebel Ali wants to have solar installed but doesn’t want to make the investment, we will lease the equipment to them and their monthly payment will be based on a KW hour production of that equipment.
“However, we do not manufacture solar equipment. In a solar value chain, you have manufacturers, installers or integrators or EPCs that build the system and you have us that pay for it and own it. So we own the systems for say 10-20 years, depending on the market, and we rely on equipment manufacturers and system integrators or EPCs to build the system. We have the technical expertise in house to choose the right equipment, to choose the right installer and we have the right team in house to analyse the customer to make sure that we are comfortable making the lease to them.”
With projects across the Middle East and North Africa (MENA), Crane says that North African countries like Egypt is a very interesting market for them and so is Tunisia and Morocco. “East Africa is a future market for us. And are other neighbouring countries like Turkey, Iran and Pakistan. At the moment, Algeria is putting in place some systems but we are heavily regulation-dependant there because most of our customers have good connections. Saudi Arabia has been very interested in the solar market but we haven’t seen any opportunities directly to provide distributed power. Primarily that is because the cost of power is very inexpensive, it is heavily subsidised, say about US$5 cents KW hour and it provided on a distributed basis to generate for that price. Oman is talking about starting solar projects and we are seeing increasing projects in Kuwait.”
With regards to the growth of solar industry in the MENA region, Crane notes that the sector has been growing relatively slowly but steadily. “Jordan first became active around 2011 and in 2016 they will be bringing out around 200MW of solar power in total. They have got some smaller systems as well. Dubai launched their Shams Dubai programme in the May 2015. So that’s a great step and both of those are relatively open programs to allow developers and consumers to identify and execute on opportunities. There aren’t any other markets in the Arabian Peninsula and the Middle East that allow you to do that today. But I believe that it will, that everybody is talking about it and taking steps towards it.
“I believe it is a growing industry in the region and I believe it certainly will be here to stay. The economics of it are superior to any other form of power in long term and it provides a stable cause for anybody who is interested in thinking long term about their business.”
Also the trends are encouraging. There are two patterns — first, the regulations and how they are structured to make the solar industry competitive. Second is the cost factor. With fluctuating fuel prices it is difficult to say how the future market will be. However, the cost of solar equipment will decrease in the long-term.
Revealing other project details in Africa and the Middle East, Crane says that Yellow Door is currently supplying over 10MW of power to customers with distributed solar. These include hospitals, hotels, shopping malls and manufacturing centres.
“One of our upcoming projects includes a 400 KW installation for Berger Paints in Al Quoz in Dubai. We are currently going through with the municipal approval. A paint manufacturer who is often associated with the industry that churns out a lot of chemicals, its objective is to bring in a CSR initiative. It also wants to look into the long-term predictability of the price of power.”
Talking about Yellow Door, Crane concludes by saying, “We are one-of-a-kind. We are an enabler for the industry. We partner with builders and developers to do the project. We assist them with the investment on solar that companies are looking for. This is also what makes us unique.”