One of the world’s largest solar and battery facilities is coming to South Africa and will hopefully offer some much-needed relief for the country’s buckling power system. Norwegian renewable energy company Scatec has started construction at its three Kenhardt projects in the Northern Cape, as per Business Tech.
The projects form part of the government’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), which aims to fill the current short-term supply gap, alleviate the current electricity supply constraints and reduce the extensive utilisation of diesel-based peaking electrical generators.
Once completed, the Kenhardt projects will have a total solar capacity of 540 MW and battery storage capacity of 225MW/1 140MWh. Under a 20-year power purchase agreement, Scatec stated that 150 MW of dispatchable power will be provided to the Kenhardt region.
“This project is a first of its kind and will be one of the world’s largest solar and battery facilities. We are now looking forward to starting construction of this unique and exciting project, which will be a major contribution to South Africa’s economy and green energy sector,” says Scatec chief executive Terje Pilskog.
“This is an important milestone in the procurement of renewable energy and proves that the sector can be relied upon to deliver much-needed electricity capacity to the grid,” added Jan Fourie, Scatec’s general manager for Sub-Saharan Africa.
With a total capital expenditure of approximately R16.4 billion to be financed by equity from the owners, this project will be Scatec’s largest investment thus far. A further R12.4 billion in non-recourse project debt will be provided by a group of lenders, including the Standard Bank Group and British International Investments.
Scatec will own the majority share of the equity in the project at 51%, while its local Black Economic Empowerment partner, H1 Holdings will own 49%.
The project’s additional power capacity will hopefully ease some strain on power utility Eskom and the country’s crumbling power system.
Eskom has been cutting 6 000 megawatts from the country’s grid at irregular intervals since June, as load shedding stage 6 left South Africans without power for hours at a time. The utility company continues to constrain South Africa’s industrial output and growth and poses a great risk to the country’s economy and public finances.
Future solutions going forward
The Scatec project will join several other alternatives and green energy projects that are already in the works across the country.
South Africa is putting more and more resources into a growing green hydrogen economy. Council for Scientific and Industrial Research (CSIR) senior research engineer Thomas Roos noted that the Saldanha Bay area was the ideal location for a green hydrogen economy as it offers solar and wind resources that have massive potential for large renewable energy electricity at competitive costs.
In a media address on Tuesday 24 May, President Cyril Ramaphosa also spoke about plans to use South Africa’s solar and wind resources to export green hydrogen at a massive scale. The project, led by energy company Sasol and the Industrial Development Corporation, is being developed in Boegoebaai in the Northern Cape.
The Western Cape government has welcomed the plan to develop a 100MW renewable energy project by ArcelorMittal South Africa (AMSA), the country’s primary steel producer. They plan to develop the renewable energy project for both Gauteng and the Western Cape, subject to the outcome of a feasibility study, which they expect to be finalised during 2023/2024.
The possibility of establishing a second state-owned power utility has also been put forth by the African National Congress (ANC) in order to reduce the risk posed by Eskom’s failings.
“Eskom has been operating as a monopoly for over 100 years and having one company taking up the role of providing energy to the entire country poses a great risk. If [Eskom] fails, its failure becomes a peculiar failure for the entire country,” said Energy and Mineral Resources Minister Gwede Mantashe.
Locally, the City of Cape Town is attempting to minimise the impact by dipping into its reserves and utilising the Steenbras Hydro Pumped Storage Scheme.
“As a City, we will do all we can to help our residents, protect service delivery and infrastructure and keep our network stable. Needless to say, stage 6 load shedding will have a profound impact on Cape Town and we are working to make sure the impact is reduced as far as possible by offering some protection from the higher stages of load-shedding,” the city announced in a statement.