Scatec to Construct Solar Energy Storage Facilities in South Africa
540 megawatts combined PV capacity co-located projects to cost US$962 million.
Renewable energy provider, Scatec, has begun the construction of three co-located solar projects with 1.1 gigawatt-hours (GWh) of total energy storage following the achievement of financial close.
Construction started six weeks after Scatec secured power purchase agreements (PPAs) for the project in the Northern Cape and a year after they won the tender to construct the solar facilities under South Africa’s Risk Mitigation Power Procurement Programme (RMIPPP) programme. The RMIPPP aims to reduce energy shortfalls on the grid.
“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,” said Terje Pilskog, Scatec CEO.
On completion, the project will have a total solar PV power output capacity of 540 megawatts and a battery storage capacity of 225MW / 1,140 MWh. The project will help reduce the grid connection size required. It will provide 150 megawatts of dispatchable power under a 20-year PPA with the Kenhardt region.
The project will be Scatec’s most significant investment, with a total capital expenditure of R16.4 billion (US$962 million). Equity from the project owners will finance it; Scatec will provide 51% financing, with H1 Holdings contributing 49%.
H1 Holdings will be the project’s local Black Economic Empowerment Partner since one of the project’s requirements is having a local partner.
The project will also have an additional R12.4 billion in debt funding. Lenders will include Standard Bank Group and British International Investments.
Scatec will provide engineering, procurement, and construction (EPC) services, along with long-term operations and maintenance (O&M) and asset management services. The project’s development and EPC contracts will bring in US$800 million revenue for the Scatec.
The RMIPPP tender by grid operator ESKOM is one of three programmes that will see about 1 gigawatt of energy storage power added to the national grid. Several gigawatt hours (GWh) of capacity are planned to be added to the South African electricity grid in the next few years.
There are two others for standalone projects as well. One is under procurement, which will see 199MW / 832MWh of standalone energy storage developed at eight sites to provide national peak shaving and ancillary services.
The other, expected to come later this year, will see over 500MW of storage tendered - details of which are expected to be made available soon.
Top Photo: Solar Power Park - Stock Image (Kasper Nymann | Dreamstime)