Kenhardt, the sleepy but arid town in the Northern Cape that bloomed from under a camel-thorn tree, is being put on the map for the most spectacular renewable energy project after the Norwegian group, Scatec, were first out of the blocks as it builds a R16-billion renewable energy facility.
The company yesterday announced it had reached financial close with the financing in place for its Kenhardt projects -- Scatec projects Kenhardt 1, 2 and 3 -- under the Risk Mitigation Independent Power Producer Procurement Programme after signing all the project agreements on June 2.
The project will deliver 150 megawatts (MW) of PV Solar Energy, with 1.1 GW of battery storage, which will be sold to power utility Eskom amid a power shortage in South Africa.
The project -- touted to be the largest PV and battery plant in the Europe, Middle East and Africa region -- will see the building of the three projects in the Northern Cape on a construction schedule of 18 months to reach commercial operation.
Each plant will contribute 50 MW, though overall production capacity is targeted at 540 MW to ensure support to the grid "day and night".
Scatec sub-Saharan general manager Jan Fourie said yesterday: “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.”
Fourie said solar panels would have to be over-installed to ensure that the contracted amount of power was delivered, due to variations in the weather or season.
"We will supply electrons to the grid. Our project will support the grid. It is much more that supplying households; any excess power we produce will have to be curtailed, which is being lost, effectively,“ he said.
Once operational, the project will have a total solar capacity of 540 MW and battery storage capacity of 225 MW/1140 MWh, and provide 150 MW of dispatchable power under a 20-year power purchase agreement to the Kenhardt region, as South Africa faces power shortages.
Fourie said a lot of the components, cables, transformers, modulars and inverters would be sourced both locally and outside the country, while the lithium ion batteries would be imported.
Fourie said at completion the project would be spectacular, as it covered 10 kilometres all round, with more than 2 million solar panels installed.
At least 3 000 people would be on site during construction to ensure that the project comes on line before the 15-month period, and connects smoothly on turn-key date.
Scatec CEO Terje Pilskog said: “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.”
Scatec said the project would be the largest investment in its history, with a total capex of R16.4bn, to be financed by equity from the owners and R12.4bn in non-recourse project debt.
The debt will be provided by a group of lenders, which includes Standard Bank and British International Investments.
Scatec will own 51 percent of the equity in the project, with H1 Holdings, a local black economic empowerment partner, owning 49 percent. The value of Scatec’s Development and EPC contract for the project is approximately R13.7bn.
Local communities and enterprises in and around Kenhardt will also benefit through the R444 million committed by the projects towards supplier, enterprise and socio-economic development initiatives.
BUSINESS REPORT