Aveng confirms plans to take equity in wind, solar projects


South African infrastructure development company Aveng plans to take up equity participation in a handful of wind and solar energy projects that may be developed as a result of the current tender for the first 3 725 MW of renewables independent power producer (IPP) projects, which closes on November 4.
In an interview with Engineering News Online following the release of the JSE-listed group’s results for the year ended June 30, 2011, CEO Roger Jardine reported that energy in general, including renewable energy, had been identified as a core future growth area for the group. The other key medium-term growth segments had been identified as water and rail.
Over the past 18 months, extensive research had been conducted into the wind and solar market prospects and Aveng had invested in its “readiness” to bid into the current request for proposals (RFP), which was released by the Department of Energy (DoE) on August 3.
“We have developed proposals on two wind and two solar farms . . . and we have grown our in-house capability [in this regard].” The projects themselves were not identified, but Jardine said that they would be located in the Western Cape and Northern Cape provinces and would be pursued in partnership with European renewables developers.
The DoE was seeking to procure 1 850 MW of onshore wind, 1 450 MW of photovoltaic capacity, as well as a further 200 MW of solar concentrated power between 2012 and 2016.
Along with the biomass (12.5 MW), biogas (12.5 MW), landfill gas (25 MW), small hydro (75 MW) and other small projects of less than 5 MW (100 MW), the associated foreign and domestic direct investment was expected to be between $10-billion and $12-billion.
Jardine noted that, although its cash holdings had fallen from over R7-billion to around R5.3-billion, its resources were sufficient to enable it to participate in potential public–private participation projects, including the taking up of equity positions in projects related to the deployment of renewable energy capacity.
Aveng was also currently considering a range of manufacturing opportunities arising from the local-content stipulations associated with the tender. “We have the capability in terms of steel fabrication and construction. And, given the runway in renewable energy, which is certainly going to increase over time as sustainability and clean energy debates become more topical, we are in a position to deliver on that [the manufacturing] part of the renewable-energy value chain as well,” Jardine noted.
But the immediate priority was to be awarded the right to develop some of the initial IPP projects to demonstrate Aveng’s capabilities in this area and to then “grow our manufacturing and construction capabilities off that”.
Jardine was similarly enthusiastic about the group’s strategic positioning for any possible large-scale nuclear build programme, which could be pursued once the South African government had finalised its thinking with regard to the role that nuclear might play in the future electricity mix.
The Integrated Resource Plan for the period 2010 through to 2030, envisaged the development of 9 600 MW of nuclear-energy capacity over that period. However, the recent disaster in Japan had raised fresh questions, to which Cabinet would need to apply its mind before the programme could proceed.
“We have assembled a prebid team and are strengthening our capability to deliver nuclear power, whether it is on the civil construction side, or on the full balance of plant, or elements of the nuclear island and the conventional island and even in the products range.
“It is a very important programme . . . for South Africa’s capacity to deliver energy to the grid, but [also] as part of the overall industrialisation process of this country,” Jardine argued.