Norwegian-based renewable energy solutions provider Scatec today signed three power purchase agreements that are set to add 150MW power to the national grid by the end of next year.
The three Kenhardt projects in the Northern Cape province of South Africa were signed under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) alongside the South African government.
The objective of the RMIPPPP is to fill the current short-term supply gap, alleviate the electricity supply constraints, and reduce the extensive utilisation of diesel-based peaking electrical generators.
This, as power utility Eskom, which supplies the majority of SA’s power needs, has repeatedly failed to keep the lights on as a result of poor maintenance at its coal-fired coal plants.
The embattled state-owned enterprise has had to resort to load-shedding as a result of a myriad of challenges.
With Eskom's woes causing a lot of damage to the fragile economy, government has been gradually introducing renewable energy sources to the national grid.
As the energy crisis continues, last month, energy regulator the National Energy Regulator of South Africa approved the first 100MW renewable power generation projects in the private market. The two 100MW solar PV projects are located in the North West province.
The RMIPPPP seeks 2 000MW of new generation or supply capacity to be procured from a range of energy technologies.
While no load-shedding is currently anticipated, Eskom today announced the power system is constrained and load-shedding may be implemented at short notice during the evening, should there be any significant breakdowns.
In a statement, Scatec says “a first of a kind in Africa”, the project will provide 150MW of dispatchable renewable energy from 5:00 in the morning to 21:30 in the evening based on a hybrid installation of 540MW of solar PV capacity and 1.1GWh of battery storage.
It notes the Scatec projects were the sole renewables only projects awarded in the technology-agnostic RMIPPP programme.
This demonstrates the attractiveness, commercial viability and universal application of hybrid renewable energy facilities, says the company.
“Today’s signing acknowledges this landmark achievement by the government, as well as the private sector in achieving this milestone in the RMIPPPP process. With these agreements being signed, we are working towards financial close under the timelines and conditions as stipulated by the authorities,” says Scatec CEO Terje Pilskog.
According to the agreements signed, financial close is to be achieved within 60 days from the signature date. Once financial close has been reached, Scatec will start construction of the projects.
“This unique solar and storage project signifies change within Africa’s renewable energy landscape and will be one of the largest renewable energy and storage projects in the world,” adds Pilskog.
Scatec will own 51% of the equity in the project with H1 Holdings, its local black economic empowerment partner, owning 49%.
The Norwegian company will be the engineering, procurement and construction provider, and it will also provide operation and maintenance, as well as asset management services to the power plants.
The Standard Bank Group is acting as lead arranger and debt provider, alongside a lender group, including British International Investment and they will provide non-recourse project financing to the projects.
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