South Africa backs PV in first major renewables tender

Despite past indications that South Africa puts far more stock in wind than solar, it handed out 632MW of PV capacity spread across 18 projects in its “first window” of renewables allocations.

By comparison, it allocated 634MW of wind spread across eight projects.

It also dished out 150MW of concentrating solar power (CSP) capacity at two projects, including the 100MW Abengoa-led KaXu Solar One.

Alongside its local partners, Ireland’s MRP got the green light for its 134MW Jeffreys Bay wind project – as well as the 50MW De Aar and 48.25MW Droogfontein solar arrays.

MRP says the three projects it is involved in will require $625m in investment. It hopes to have them operational by 2014.

The largest wind winner was the 135MW Cookhouse project, which is backed by Australia’s Macquarie Group andslated to use Suzlon turbines.

Following Cookhouse is MRP’s Jeffreys Bay, which is understood to be using Siemens turbines; and the 97MW Dorper project, backed by Capetown-based Rainmaker Energy Projects.

Germany’s Nordex appears to have emerged in pole position as far as turbine-supply to the winning projects is concerned, and is likely to provide 174MW – 28% of the total from the first round.

With about one-fifth of the total each, Vestas, Siemens and Suzlon were the other main suppliers in line to reap the rewards in South Africa, providing that the projects translate their earlier commitments into firm orders.

The three largest PV winners were the Solar Capital De Aar and the Kathu Solar Energy Facility – both 75MW – and Kalkult at 72.5MW.

Momentous Energy, the developer behind the winning RustMo1 Solar Farm, tells Recharge it has hired Germany’s Juwi to act as engineering, procurement and construction contractor.

The smallest wind project to receive preferred bidder status was the 26MW Dassiesklip plant, while the 5MW SlimSun Swartland Solar Park was the smallest on the PV side.

Nearly all of the winning projects are backed by foreign players. However, all projects were required to have a certain level of local ownership – a point of controversy and uncertainty for future rounds – and were judged in large-part on their ability to create local jobs.

“This is not an opportunity for those who won to go off and sell their bids,” says South African energy minister Dipuo Peters. “We are not in the business of granting projects so developers can profit from selling them off.”

In total, the government awarded 1.42GW of capacity, having received bids for 2.13GW. It intends to hand down another 2.2GW early next year on its way to 3.63GW of installed renewables capacity by 2016.

The renewables industry has been frustrated by the lack of progress in coal-dependent South Africa, particularly after a feed-in tariff mooted several years ago ultimately failed to materialize.

“Finally, finally, finally this is the beginning of the South African wind market,” says Steve Sawyer, chairman of theGlobal Wind Energy Council. “We’ve been waiting many years for this day, and it’s fantastic news.”

Sawyer sees great potential – and great danger – for the nascent industry.

The South African government has indicated it wants a wind market of about 400MW per year over the next two decades.

Sawyer tells Recharge he believes the real market will “either be much larger or much smaller than that”, depending on the success of the first generation of projects and how quickly a local supply chain takes shape.

The South African government has made clear that it will quickly lose patience with renewables if local manufacturing jobs are not created.

The announcement came as South Africa hosts the COP17 UN Climate Change Summit in Durban.

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