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The renewable energy units of First Solar Inc (FSLR) and Abengoa SA (ABG) are targeting the Middle East and North Africa as utilities seek to cut reliance on burning oil and natural gas from power plants
"The providers of plants generating electricity from the sun can produce energy at a price competitive with fossil fuels," said Raffi Garabedian, chief technology officer for First Solar.
"That dynamic drives the economic proposition for renewables in this region.
"Demand for alternatives to burning liquid fuels 'creates a very healthy long-term market for photovoltaics in the region," Garabedian told Bloomberg.
Photovoltaic or PV cells, developed by First Solar, capture sunlight and convert heat directly into electricity. Concentrated solar power or CSP plants, built by Abengoa Solar, use mirrors reflecting the sun’s rays to heat a fluid that creates steam to turn a turbine.
“The Middle East and Africa are areas where we see opportunities in the short term,” Santiago Seage, CEO of Abengoa Solar said, adding, "Abengoa Solar’s CSP facilities are well suited to the region since gas is available to help run turbines at its plants, boosting generation capacity and allowing for potentially constant supply."
PV plants are cheaper than CSP facilities because panel prices have plunged at a faster rate than the fluid-based plants, also known as solar thermal units, he said. The lower-cost power the PV plants can generate has the disadvantage of being available only when the sun is shining, while solar thermal plants can store the heated fluid for future use, Seage also added.
Middle East and North African states are seeking new power sources to supply domestic demand as their populations and economies grow.
The countries, many of which are gas and oil exporters, use the fuel at home to supply markets where power is sold at subsidised prices.
With the European benchmark, Brent crude selling at more than US$110 a barrel, using liquid fuel domestically costs oil producers about US$90 for each barrel of crude, Adnan Amin, director general of the Abu Dhabi-based International Renewable Energy Agency, had said earlier.
First Solar is now producing complete power plants for utilities, helping it better compete in a market in which the cost of photovoltaic cells has plunged, Garabedian said.
"That shift, initially made in the US market, has made the company more competitive internationally where utilities want reliable power supply.
Abengoa Solar is producing electricity at the Shams 1 power plant that’s completing testing in Abu Dhabi.
The 100MW plant, a joint venture with Abu Dhabi’s state-owned renewable energy company Masdar, will be inaugurated this quarter and reach full generation capacity by the summer, Seage concluded.