Government yesterday announced the appointment of three additional preferred renewable energy bidders in a bid to add a total of 150 megawatts (MW) to the national grid.
Norway-based Scatec was awarded preferred bidder status on three projects totalling 150MW of contracted capacity under the Risk Mitigation Power Procurement Programme (RMIPPP).
This will bring the total megawatts procured under the programme to 1 995.76MW following the completion of value-for-money negotiations.
The RMIPPPP bid window was released to the market in August 2020 following the promulgation of the Ministerial Determination of 2 000MW.
The three projects, Kenhardt 1-3 in Northern Cape, in total consist of 540 MW solar and 225 MW/1 140 MWh battery storage.
They are the only projects with preferred bidder status exclusivity making use of renewable energy technology, making it arguably one of the largest single-site solar-storage hybrids in the world.
Scatec said the solar and storage solution will provide dispatchable power from 5am to 9.30pm, delivering much-needed power to the South African economy.
The power will be sold under a 20-year Power Purchase Agreement with a paid capacity charge.
It said that financing had already been sourced as part of the bidding process, with project capital expenditure estimated to be $1 billion (R13.7bn).
This will be funded by project finance debt from a consortium of commercial banks and development finance institutions with expected debt leverage of 80 percent.
Scatec chief executive Raymond Carlsen said this was truly a great milestone for the company and renewable energy.
“We are demonstrating that cost-competitive, dispatchable solar power can be delivered at large scale with short implementation time,” Carlsen said. “This confirms that renewable energy is an ideal choice for driving electricity generation growth in Africa and other developing countries.”
Scatec will own 51 percent of the equity in the project, with its local black economic empowerment partner, H1 Holdings, owning 49 percent.
Scatec will be the engineering, procurement and construction (EPC) provider and provide operation and maintenance as well as asset management services to the power plants.
Financial close is expected later this year, with grid connection by the end of 2022.