Renewable energy company Masdar led a group that won the bidding to build a solar-power plant in Dubai to produce what could be the world’s cheapest electricity generated from the sun.

The Masdar consortium is set to complete the 800-megawatt power project by 2020, state news agency WAM reported Sunday. Spanish renewable energy developers Fotowatio Renewable Ventures and Gransolar Group are part of the venture, according to the statement. FRV is a unit of Saudi Arabian conglomerate Abdul Latif Jameel.

Dubai, the second-largest sheikhdom in the United Arab Emirates, is adding solar capacity to diversify its energy mix and help meet growing demand for electricity.  The Masdar project will generate electricity at 2.99 cents per kilowatt-hour, Dubai Electricity & Water Authority Chief Executive Officer Saeed Mohammed Al Tayer said Monday at a press conference to announce the award.

The price bid for the project would undercut the cost of power generated from coal. It’s 15 percent lower than the previous record for solar power set in Mexico in April, according to Bloomberg New Energy Finance.

Dubai plans to invest 50 billion dirhams ($14 billion) to generate a total of 5,000 megawatts of power by 2030 at the desert solar park, helping provide 25 percent of the emirate’s electricity from clean energy sources. The Persian Gulf sheikhdom currently has 13 megawatts in operation at the desert site and a further 200 megawatts under construction. The project awarded to the Masdar-led group will make up the third phase of the park. DEWA this month announced plans to build a fourth phase consisting of another 1,000 megawatts.

Abu Dhabi, the largest emirate in the U.A.E., is seeking developers in a separate bidding process for a 350 megawatt solar project. Masdar, based in Abu Dhabi, operates a 100 megawatt solar-thermal plant in the emirate.

Source: www.bloomberg.com