A hybrid solar and storage project in Kenhardt, the Northern Cape has reached financial close.
- A new hybrid solar PV and battery storage facility in the Northern Cape will be one of the world’s largest of its kind.
- The project is 10km wide and will include about two million solar panels.
- Its construction is expected to create about 2 000 jobs, and it is estimated to take 15 months before power is fed to the grid.
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What is set to be one of the world’s largest hybrid solar PV and battery storage facilities – around four times the size of Cape Town stadium – is due to start construction, and it is already yielding development benefits for the small Northern Cape Town of Kenhardt.
Renewable energy developer Scatec, which is headquartered in Norway, on Tuesday reached financial close for its three projects Kenhardt 1, 2 and 3. It has an installed solar PV capacity of 540MW and battery storage capacity of 225MW/1 140MWh. It will supply 150MW dispatchable power to the grid from 05:00 to 21:30 once it is operational.
Scatec has a 20-year power purchase agreement in place with Eskom.
These projects are unique in that battery storage addresses the intermittency challenges of renewables – when there is no wind or no sunshine, then no power is produced.
The projects are part of South Africa’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), which was launched in August 2020. The programme aimed to procure about 2 000MW of generation capacity to help address the country’s energy supply constraints. But it’s been hit by delays, and Scatec’s projects are the first among the 11 preferred bidders that were named.
The eight remaining projects are at varying stages of preparation to sign agreements, and developments in this regard are to be announced in due course, the Department of Mineral Resources and Energy said in a statement.
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During a media briefing on Wednesday, Scatec’s general manager for sub-Saharan Africa operations, Jan Fourie, said that the project has been in development since 2014. At the time, Scatec was planning for it to be part of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
“Never in my wildest dreams did I think we would be building one of the largest solar and battery plants in the world in our own backyard. This is the biggest project Scatec has ever done. It is a significant milestone for the company,” said Fourie.
The project is 10km wide, from side to side. It will include about two million solar PV modules. Construction is expected to take 15 months before power can be fed to the grid. About 2 000 jobs are expected to be created during the construction period.
The project is 10 km wide, side to side.
Supplied Scatec/ Google Maps
The project is Scatec’s largest investment to date. It’s capital expenditure is R16.4 billion and will be financed by Scatec (51%) and its black economic empowerment customer, H1 Holdings (49%). About R12 billion will be financed through debt.
“It is four Cape Town stadiums, to put it in perspective,” said Fourie.
Already there have been development benefits. Vodacom set up a tower for allowing communications at the facility and the greater Kenhardt region – an area which previously had almost no signal, said Fourie.
A Vodacom tower has been installed to allow communications at the facility.
The DMRE noted that local communities and enterprises in and near Kenhardt will benefit through R444 million committed to supplier, enterprise and socioeconomic development initiatives.
The projects also commit to 40% local content during its construction and operation.
Fourie explained a significant portion of the projects are locally sourced, such as transformers and cables. Solar PV modules, trackers, and inverters are sourced partially locally and abroad. The lithium-ion batteries will be imported.
Fourie said the stalling of the REIPPPP project under former president Jacob Zuma’s administration decimated the local manufacturing industry. “Where we previously had five or six manufacturers, it is now down to about two.” There are supply chain constraints in the market, but Scatec is working with local suppliers to meet the local content requirements.
Fourie also noted the global supply chain challenges that drove up prices of renewable energy components. He said that Scatec’s supply chain team is aware of the challenges, and there are contingency plans to deal with them. “… We believe we have all necessary contingency plans in place to still meet timelines,” said Fourie.
As for future project prospects in the Northern Cape, Fourie highlighted that the province’s grid capacity is currently congested. Scatec, however, is open to doing standalone battery projects in the province.