Category Archives: Natural Gas

Solar Energy in Qatar: The Business Case

Qatar_Solar_LCOEThe economics for solar energy in Qatar are challenged by some of the lowest natural gas prices on Earth, combined with a local and subsidized electricity tariff with retail power prices of $0 to $27.40/MWh, commercial prices of $24.66 to  $41.10/MWh, and industrial power prices of $19.18/MWh.

Notwisthstanding, there is still a solid business case for solar energy in Qatar given the rapid decline in capital costs since 2009, and the ability to generate revenues from displaced domestic gas demand that results following the introduction of renewable energy capacity.

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Solar PV and Gas Displacement in Qatar

GasDisplacementA critical component of the economics of solar PV in Qatar is the ability to translate solar power production into local gas  market efficiencies and displacement of natural gas demand.  More important: the ability to extend gas displacement into higher LNG exports AND to link the export cash flows to the income statement of the solar power systems.  The result can be solar PV projects that are economically feasibility in the absence of government grants, production subsidies or tax incentives.  Meanwhile, project cash flows tied to natural gas exports can be 20% to 400% greater than cash flows from power sales, depending on the domestic power tariff in force and the gas marketing strategy used.  

Posted in Economics, Natural Gas, Project Valuations, Qatar RE, Renewable Energy, Solar | Leave a comment