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Some more background here: https://www.greentechmedia.com/articles/read/saudi-solar-bid-makes-solar-cheapest-electricity-in-world https://www.greentechmedia.co

Some more background here: https://www.greentechmedia.com/articles/read/saudi-solar-bid-makes-solar-cheapest-electricity-in-world https://www.greentechmedia.com/articles/read/saudi-solar-bid... 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-renewable-energy-auctions-may-not-be-sustainable https://www.greentechmedia.com/articles/read/indias-renewabl...

Rexxar 9y ago
It's a "feature", too optimistic bidders always get the bid as they give the best price. That's part of the reason this sort of bids go wrong so often.
- seb1204 9y ago
  Correct, initial bids rarely match the final cost in this part of the world. They also are highly dependent on the level of detail and soundness of the specification/scope that was bid for.
- deleted 9y ago
  [deleted]
Gustomaximus 9y ago
> Saudi Arabia has plenty of sun This could be a problem as above 25c panels can lose efficiency so temps in the middle east could drop panel efficiency quite a bit.
- philipkglass 9y ago
  Given a constant level of illumination, solar cells perform better at lower temperatures. But for higher total generation it's better to install panels in hot-and-sunny regions than cool-and-cloudy ones, even if the panels in the latter region convert a higher percentage of light to electricity. Cold-and-sunny conditions are harder to come by, but on (e.g.) a clear winter day at noon, with cold air temperature and plenty of sun, panels can perform beyond their nameplate ratings.
  - zeristor 9y ago
    So where is the most efficient place for solar panels, given that the solar panels are heated by the sun, they could be coated to reflected IR. A cooler climate could help heat be convected away. High altitude deserts like the Atacama might be ideal, but there's less atmosphere for convective heat transfer. I do love an optimisation challenge.
thinkling 9y ago
> 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.
- michaelbuckbee 9y ago
  I had the exact same thought. Two ideas: 1. They're well capitalized enough that they think the actual cost to produce is going to drop significantly. Maybe they're planning on a 50 year lifecycle for this solar plant and thinking: we'll we'll lose money now, but when we have to replace all these panels in a decade, at that point they'll cost nothing and for the remainder of this project we'll make bank (though I'm not even sure if that's how this works) 2. They're somehow financially co-mingled with a solar cell producer and have a significant hidden cost advantage.
  - ianai 9y ago
    Or a mixture of both most likely. It might be they’re already there, too.
- hn_throwaway_99 9y ago
  I would be extremely wary when the lowest bidder is that much lower than all the other competitors. See: legions of failed highway projects in the US.
- seb1204 9y ago
  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.

Rexxar 9y ago

It's a "feature", too optimistic bidders always get the bid as they give the best price. That's part of the reason this sort of bids go wrong so often.

seb1204 9y ago
Correct, initial bids rarely match the final cost in this part of the world. They also are highly dependent on the level of detail and soundness of the specification/scope that was bid for.
deleted 9y ago
[deleted]

Gustomaximus 9y ago

> Saudi Arabia has plenty of sun This could be a problem as above 25c panels can lose efficiency so temps in the middle east could drop panel efficiency quite a bit.

philipkglass 9y ago
Given a constant level of illumination, solar cells perform better at lower temperatures. But for higher total generation it's better to install panels in hot-and-sunny regions than cool-and-cloudy ones, even if the panels in the latter region convert a higher percentage of light to electricity. Cold-and-sunny conditions are harder to come by, but on (e.g.) a clear winter day at noon, with cold air temperature and plenty of sun, panels can perform beyond their nameplate ratings.
- zeristor 9y ago
  So where is the most efficient place for solar panels, given that the solar panels are heated by the sun, they could be coated to reflected IR. A cooler climate could help heat be convected away. High altitude deserts like the Atacama might be ideal, but there's less atmosphere for convective heat transfer. I do love an optimisation challenge.

thinkling 9y ago

> 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.

michaelbuckbee 9y ago
I had the exact same thought. Two ideas: 1. They're well capitalized enough that they think the actual cost to produce is going to drop significantly. Maybe they're planning on a 50 year lifecycle for this solar plant and thinking: we'll we'll lose money now, but when we have to replace all these panels in a decade, at that point they'll cost nothing and for the remainder of this project we'll make bank (though I'm not even sure if that's how this works) 2. They're somehow financially co-mingled with a solar cell producer and have a significant hidden cost advantage.
- ianai 9y ago
  Or a mixture of both most likely. It might be they’re already there, too.
hn_throwaway_99 9y ago
I would be extremely wary when the lowest bidder is that much lower than all the other competitors. See: legions of failed highway projects in the US.
seb1204 9y ago
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.