Out-Law News 2 min. read

New South African solar plant is ‘milestone for energy sector investment’


Operations have been launched at a new 50-megawatt concentrated solar plant (CSP) in South Africa’s Northern Cape.

The Bokpoort plant, developed at a cost of 5 billion rand (ZAR) ($320 million) by a consortium led by Saudi Arabia’s ACWA Power, is part of South Africa’s renewable energy independent power producers procurement programme (REIPPPP).

According to South Africa’s government, “within five years the REIPPPP has attracted ZAR 194bn ($12bn) of investment and is fast becoming a global model and blueprint for other countries, providing policy certainty and transparency”.

South African trade and industry minister Rob Davies, who was joined at Bokpoort’s launch on 14 March by Saudi Arabian trade and commerce minister Tawfiq Al Rabiah, said the project represented a “key milestone” in the government’s energy infrastructure investment programme.

Davies said: “With its record 9.3 hours thermal energy storage capacity, the Bokpoort CSP project will provide electricity to approximately 21,000 households during the day as well as night time and save approximately 230,000 tonnes of CO2 equivalent emissions during every year of operation.”

ACWA Power said it is a developer, investor, co-owner and operator of “a portfolio of power generation and desalinated water production plants with a presence in 12 countries”.

ACWA Power chairman Mohammad Abunayyan said: “Equipped with more than nine hours of thermal storage capacity, the Bokpoort CSP plant operates like a giant rechargeable battery. It is utilising the only reliable renewable technology available to South Africa today at a commercial scale to cover the country’s daily evening peak demand from 5pm to 9pm, which is crucial for increasing sustainable supply for Eskom, the South African public electricity utility.”

ACWA Power’s managing director for the Southern African region, Chris Ehlers, said “ZAR 2bn ($123m) worth of locally sourced components made in South Africa were used in the construction of Bokpoort and the creation of 1,300 construction jobs”.

Ehlers said the company is sharing 5% of the ownership of the business venture with the local community via a community trust “and 5% ownership with the national non-profit organisation, LoveLife”. In addition, ACWA Power has also committed ZAR 5 million ($309,000) to date in providing education and training for people from the local community and in improving local social infrastructure, Ehlers said.

Bokpoort “is the first in a series of investments in the power sector” that ACWA Power said it is making in South Africa. “The company is expecting to commence construction on the 100 MW Redstone CSP project, also in the Northern Cape, and is awaiting the outcome of tender submissions for a 300 MW coal-fired plant in Mpumalanga and another 150 MW CSP plant also at Northern Cape.”

An agreement to develop the Redstone project was signed by ACWA Power with the Overseas Private Investment Corporation (OPIC) and US-based energy developer SolarReserve in 2015. OPIC, the US government’s development finance institution, has committed $400m of debt financing to support the project.

Four large scale solar plants went online in South Africa in the first-half of 2014 as part of the first round of the REIPPPP programme.

Last year, Italian renewables developer Enel Green Power (EGP) started building the Pulida solar power plant in South Africa’s Free State province. EPG said the 82.5 MW plant will be able to generate more than 150 gigawatt hours of electricity each year when fully operational, which EGP said is “equivalent to the annual consumption needs of around 48,000 South African homes”.

Figures from a study published in 2015 by the South African government-owned Council for Scientific and Industrial Research said renewable energy from South Africa’s first wind and solar plants generated a “net financial benefit” of around $702,000 for the country in 2014.

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