Scatec will develop three projects in South Africa totalling 540MW of solar and 225MW / 1,140MWh of battery storage after being awarded preferred bidder status through a government tender.
The Norwegian independent power producer was awarded 150MW of contracted capacity through the country’s technology agonistic Risk Mitigation IPP Procurement Programme (RMIPPPP).
Each of the Kenhardt 1, 2 and 3 plants will have the same generation capacity and be developed in the Northern Cape province, with the solar-plus-storage installations set to provide dispatchable power daily from 5am to 9.30pm. Scatec will receive payment under a 20-year year power purchase agreement with a paid capacity charge.
Jan Fourie, Scatec’s general manager for Sub-Saharan Africa, told PV Tech that the company oversized both the solar and battery capacity to cater for factors such as seasonality and inter-annual variations. During the day, power from the PV plants will go directly into the grid, with any excess power used to charge the batteries. Once they are charged and a single project is exporting 50MW, anything above that will be curtailed.
Rules from the tender stipulate that the company will not be able to sell excess power elsewhere, so “there will be a fair amount of curtailed energy”, Fourie added.
The projects awarded to the company are the only ones with preferred bidder status in the RMIPPPP emergency procurement round that exclusively make use of renewable energy technology.
“This is truly a great milestone for Scatec and renewable energy. We are demonstrating that cost-competitive dispatchable solar power can be delivered at large scale with short implementation time,” said Scatec CEO Raymond Carlsen.
Financing has already been secured for the three projects, with financial close expected later this year and grid connection by the end of 2022. CapEx will be around US$1 billion and will be funded by project finance debt from a consortium of commercial banks and development finance institutions, with expected debt leverage of 80%.
In addition to its role as engineering, procurement and construction provider, Scatec will also carry out operation and maintenance as well as asset management services for the plants.
Shortlisted bidders for the RMIPPPP tender were announced in March, with eight projects totalling 1,845MW of capacity selected. The solutions provided by those preferred bidders feature a range of technologies such as solar PV, wind, battery storage, liquified natural gas and diesel.
Scatec currently has 448MW of operational solar capacity in South Africa and has completed six PV plants under the country’s Renewable Energy Independent Power Producer Programme. South Africa is one of four markets – along with India, Brazil and Vietnam – where the company is focusing on growing its pipeline to help it reach its target of having a 15GW renewables portfolio in the next four years.