May 7, 2009 / 10:31 AM / 10 years ago

Abu Dhabi's Masdar to save $105 mln on solar plant

DUBAI, May 7 (Reuters) - Abu Dhabi’s Masdar will save about $105 million on the 100 megawatt Concentrating Solar Power (CSP) plant it is constructing in the emirate due to falling prices of raw materials, a company executive said on Thursday.

Masdar, which is expected to start commercial operation of the Shams 1 CSP plant in 2011, will award the main construction contracts sometime in May, said Olaf Goebel, a senior project manager with Masdar.

“When we first asked for bids in October we could not believe the cost estimates...we told the contractors we don’t want to start negotiating with you on this bid,” Goebel told Reuters on the sidelines of an industry conference.

“Costs have come down by about 20 percent.”

The construction of the CSP plant is now estimated to cost about $520-$550 million, Goebel said.

CSP technologies use mirrors to concentrate sunlight onto receivers that produce electricity via a steam turbine or other means.

New bids were called in February, which Goebel said was one of the reasons for the delay in starting work on the project, originally scheduled to be completed by the end of 2010.

Masdar’s Shams 2 CSP plant is expected to launch a bidding round in December or January, Goebel told the conference.

Commercial operation for this project is expected to be about “one-and-a-half years behind Shams 1”, Goebel said.

Masdar was set up by the Abu Dhabi government to develop sustainable and clean energy. It is 100 percent owned by the Abu Dhabi government through the Mubadala Development Company.

Masdar, also known as the Abu Dhabi Future Energy Co, said last year it plans to spend $15 billion in the first phase of an initiative including solar, wind and hydrogen power projects in the United Arab Emirates.

It is also building a carbon-neutral city in Abu Dhabi, which will include the largest solar power plant in the region with solar panels supplied by First Solar Inc (FSLR.O). (Reporting by Luke Pachymuthu; editing by Thomas Atkins)

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