Abengoa and South African CSP

Abengoa’s plans for multiple plants at its Khi Solar and Kaxu Solar sites are a sign of bigger things to come in South Africa.
By Annabel Eaton in Cape Town
Months of anticipation regarding South Africa’s competitive bidding process culminated with the official announcement of the country’s first 28 renewable energy independent power producer (IPP) preferred bidders in early December at COP 17, the United Nation’s climate summit. These bidders now have until June 2012 to take their projects to financial closure, with construction to begin shortly thereafter.

Dipuo Peters, Energy Minister, announced the preferred bidders and thanked those who had partnered with SA to ensure that the tender had been run in an “open, fair and equitable” manner. She commented: “The introduction of certain technologies, prescribed by Government’s Integrated Resource Plan (IRP), will change our power generation paradigm forever.”

She described the IRP as a blueprint for the energy mix that SA is striving for. “The blueprint indicates Government’s clear intention not only to diversify our energy mix away from the tradition of fossil-fired power generation, but also to take advantage of the possibilities relating to the green economy in creating new industries and much needed jobs.”

The preferred bidders were among an initial batch of 53 bids submitted for the November 4 bid window. They represent potential capacity of 1 416 MW, and several billions of rand in investment.

The two Concentrated Solar Power (CSP) tenders were awarded to Abengoa Solar South Africa. They include the 50 MW Khi Solar One plant and the 100 MW KaXu Solar One plant. Based in Spain, Abengoa operates internationally.

Abengoa’s projects were selected due to the company’s extensive international track record and experience in the development, construction and operation of CSP plants, coupled with the in-country experience of its local team in SA. This experience enabled it to meet all the financial and economic development criteria required by the Department of Energy (DoE).

Two technologies

Abengoa has opted to use tower technology at Khi Solar One and parabolic trough technology at KaXu Solar One.

Dr Louis van Heerden, General Manager, Abengoa Solar South Africa, says: “Each technology has unique characteristics that lend itself to the specific site and requirement. We selected the most appropriate technology for the two sites, after considering the site characteristics.”

Khi Solar One will be situated on a 600-hectare site close to Upington in the Northern Cape. About 600 construction jobs will be created during construction and approximately 35 full-time plant operators will be employed.

KaXu Solar One will be located on a 1 100-hectare site near Pofadder, also in the Northern Cape. It will prevent 315 000 tons of CO2 emissions each year. Roughly 800 jobs will be created during construction, and around 35 permanent plant operation jobs thereafter. Around 200 direct and indirect full-time jobs a year will be created in the local community.

Multiple plants

“The intention is to develop additional plants adjacent to the first units, in a solar platform. To this end, the Abengoa sites will allow for multiple plants to be developed,” Van Heerden continues. “The plants are not modular and cannot be enlarged. A specifically-sized turbine and generator to provide the desired capacity has been installed at each plant and the complete plant has been optimized around the desired capacity.”

When asked what Abengoa perceives as the main challenge presented by SA’s market, Van Heerden states that it is the long-term certainty of capacity to be deployed and, through this, the ability to leverage economy of scale benefits.

“The DoE’s IPP programme has provided a fantastic vehicle to introduce CSP into the electricity supply industry, and the Government can only be applauded,” he says.

“However, to enable increased local manufacturing and development of local technology, longer term commitments are required that will lead to manufacturing facilities being locally constructed and the development of multiple plants that will realize the economy of scale reductions,” Van Heerden explains.

“Conventional technologies, such as coal-fired power plants, have benefited from implementation in large numbers. If CSP can get the same opportunity it will be able to become competitive with conventional generation options in the future.”

A further two bid windows are planned for 2012, and two more for 2013, as part of the programme to procure a total of 3 725 MW of renewables capacity from IPPs before 2016. The next bid window will close in the first quarter of 2012, with more than 2 309 MW, or more than 60% of the capacity, yet to be allocated.

100 MW of the 3 725 MW capacity is to be for small-scale renewable projects of between 1 MW and 5 MW. A simplified bid document is to be released during the first quarter of 2012.

Commenting on the bidding process to date, Engineering News Editor, Terence Creamer, describes it as professional and well-managed. “What emerged is a world-class tender process, one that we haven’t really seen in any other setup of South African society for procurement.”

While the implementation of the bidding process initially experienced some teething problems, the process is now on firm footing and is set to forge ahead. Clearly there is much light on the horizon when it comes to the renewable energy industry, and more specifically CSP, in SA.
To respond to this article, please write to the Editor:
Rikki Stancich: rstancich@csptoday.com