In an effort to alleviate crippling electricity supply constraints and reduce the use of advanced diesel power plants, the South African government last August launched a technology-independent emergency tender for 2 GW of production capacity.
The Risk Mitigation Independent Power Producer Procurement Program (RMIPPPP) clarified that distributable electricity should be provided when it is most needed – between 5 a.m. and 9:30 p.m. daily – to help reduce capacity gaps on the grid.
Reinforcing the need for the supply cycle, South Africa has had its worst year of scheduled power outages, also known as power cuts, according to data from the National Council for Scientific and Industrial Research. The country was affected by 859 hours of load shedding, or nearly 10% of 2020 without electricity.
With multiple generation facilities at different locations being able to be bid as a single distributable project, the RMIPPPP initially closed with eight preferred bids that will provide a total of 1,845 MW of contractual capacity from projects. combining technologies such as photovoltaic solar energy, wind power and liquefied natural gas. and battery storage.
Although the winning bids featured a total solar capacity of 1,147 MW, each of these projects would combine PV with diesel, reciprocating gas or LGP engines. However, illustrating the potential of solar power plus storage to provide distributable power, it was announced earlier this month that Scatec had secured preferred bidder status for three plants of equal size totaling 150 MW of capacity. contract which will include photovoltaic installations with battery storage, making them the only installations in the tender using exclusively renewable technologies.
The Norwegian company, which has already completed six solar parks in South Africa as part of the country’s Independent Renewable Energy Production Program (REIPPP), will include 540 MW of solar energy and 225 MW / 1,140 MWh of storage by battery in the Kenhardt 1, 2 and 3 power plants in the North Cape Province.
To account for factors such as seasonality and year-to-year variations, Scatec has oversized both the solar capacity and the battery capacity of the power plants, which will supply solar energy to the grid during the day, with excess energy. used to charge the batteries. Once they’re billed and a single project exports 50MW, anything over that amount will be reduced.
With the RMIPPPP winning projects not being allowed to sell excess electricity elsewhere, there should be “a fair amount of reduced power” from the facilities, according to Jan Fourie, Scatec’s managing director for sub-Saharan Africa. He says the company’s only renewal solution reduces fuel risk for the country: “You don’t have to look into your crystal ball and guess what currency and commodity prices are going to do. in the future.
The rules of the tender call for the eight initial preferred bidders to reach financial close by the end of July 2021, with the first projects to be connected to the grid from August 2022. Although there is had a 65% local content requirement on aluminum frames for PV modules purchased, this was recently dropped due to an insufficient supply of aluminum in the domestic market, said David Núñez Blundell, co-founder of Seraphim Southern Africa, which currently operates a 300 MW module assembly plant in the country’s Eastern Cape province.
With such a tight schedule to get projects funded and built, Núñez Blundell says it would have been risky for developers to have relied on the acceleration of local aluminum production on time: “I think it will be easier. for our IPP clients to reach financial close this regulation being relaxed as there was a lot of risk to rely on us to find local aluminum as it is not available.
The RMIPPPP could undergo further changes as Karpowership, a Turkish company that has secured 60% of the total capacity under contract through three LNG vessels to be moored in ports, now faces a legal challenge by a competing competitor. With the company offering to supply 1,220 MW of capacity, critics have warned its plans will block production of additional fossil fuels for the 20-year term of the contract.
Last year, fossil fuels provided 89% of South Africa’s electricity, with the country leading the G20 for its dependence on coal power, according to Ember. The think tank said in a recent report that over the past decade, significant investment has been made in new coal capacity, which has “suffered significant cost increases and construction delays.” resulting in increases in electricity tariffs for consumers, “resulting in a collapse in demand.” for electricity ”.
Nonetheless, a total of 1.04 GW of new solar and wind capacity would have been installed in the country in 2020, the first year since 2016 when annual installations have exceeded the gigawatt mark.
Niveshen Govender, COO of the South African Photovoltaic Industry Association (SAPVIA), said that while the trade body would have liked solar photovoltaic power to feature more in the RMIPPPP, the government has “acted with the appropriate rush. to ensure that much needed energy is added. to the distribution network ”.
He says the distributable energy requirements presented a challenge for renewables, but the offerings showed the “flexibility and innovation” of solar power when combined with other renewable energy solutions. , gas and energy storage.
Solar deployment is also driven by demand from companies looking to protect themselves from continuous load shedding. Earlier this year, petrochemical company Sasol announced a partnership with French industrial gas supplier Air Liquide to jointly acquire 900 MW of renewable energy by 2030. Sasol said the transaction will be the largest supply agreement in clean energy never entered into by the South African private sector.
This year, the Shoprite supermarket chain has also completed rooftop solar installations at 19 sites in South Africa and neighboring Namibia, which will provide 12,300 MWh of electricity per year, while the mining company Gold Fields has been awarded the Regulatory approvals for a 40 MW photovoltaic project that will provide approximately 20%. the electricity needs of its South Deep mine.
Additional investments in solar capacity should be released by the reforms announced yesterday (Thursday) by President Cyril Ramaphosa, which will increase the authorization threshold for on-board generation projects from 1MW to 100MW. Ramaphosa said the move reflects the government’s ambition to reduce the impact of power cuts on businesses and households.
The announcement builds on the government’s goal of acquiring 6 GW of photovoltaic solar panels by 2030 as part of its 2019 Integrated Resource Plan, with the long-term goal of bringing the country to zero net emission by 2050.
According to the governor of SAPVIA, the RMIPPPP should be considered in conjunction with the REIPPP, with the fifth bid window taking place this year. Next year, he says, 1 GW of PV solar panels are expected to be purchased through this tender window in addition to the 2 GW construction of RMIPPPP, adding: “The next 12 months are full of fantastic promises. for the solar photovoltaic sector.