Making solar headway in South Africa with first CSP project08/07/2015
ENGIE has been nominated Preferred Bidder by the South African Department of Energy (DoE) for the Concentrated Solar Power (CSP) Kathu Solar Park project located in the Northern Cape Province, about 600 km south-west of the capital Pretoria.
Meet with Wim Alen, Senior Business Developer who leads the Kathu project team in the SAMEA region.
He tells us how Kathu became a successful CSP Project Bid.
How do you feel since we have been appointed preferred bidder for Kathu?
I am proud to see a new technology entering ENGIE’s portfolio. The Kathu solar park will have 106 MW of installed capacity in solar PV and this is a landmark project for the Group. It was not easy to secure it in the time frame we had, but it was worthwhile the effort we put into this!
How long have you been working on the project? Tell us more about Kathu.
It all went very fast. We are a small team (including legal, finance and technical people) and worked within a tight deadline. We discovered the opportunity in September 2013 and by November 2013 we signed an MoU with Anglo American and Investec and in less than five months we submitted the bid to the DoE, in March 2014. In December 2014 DoE announced that we had been selected as preferred bidder.
Kathu will be the first CSP project for ENGIE, using parabolic troughs with more than 100 MW capacity and with self-storage ability of 4.5 hours. Developing CSP is very demanding in land so we have secured a site of 10km2. The eastern part of the site is considered as a Natural Reserve so we are looking at how best preserving it with the community. The plant will occupy 4.2km2 and we may have the opportunity in the future to develop a ‘Kathu 2’ Solar Park project in the southern part of the site.
What are the next steps for you and the team in the project?
Our main next step is to secure the Financial Close to be able to start the construction. If everything goes on schedule, we are expecting to close by the end of the summer 2015 for a commissioning in early 2018 (NTP +28 months).
What are the main challenges of implementing this CSP project in this region?
The solar park is located in a remote area near Kathu in the Northern Cape province of South Africa, making recruitment of qualified staff challenging as Kathu was traditionally a small mine town. Our EPC contractor may have difficulties to attract qualified people in the region. Despite that the right skill-set does exist in South Africa as there are other CSP projects, operating a CSP is also linked to the knowledge of local weather conditions. Dedicated training will be crucial.
It is also a learning process for us. The operation of a CSP solar park by itself is a challenge. It is estimated than it will need about 80 staff including 25 staff for security. Operating parabolic troughs requires to get visual inspection on daily basis. There is also some specificity linked to the nature of the project, for instance our O&M work will be supervised by our EPC contractor for a certain period of time to ensure we get the maximum out of it.
By being an employer in South Africa, we also abide to the Black Economic Empowerment (BEE) programme, so we hope to capitalize on our experience in the country especially through the other Group projects (West Coast One, Peakers).
More about the Kathu solar Park project
The preferred bidders will enter into a 20-year Power Purchase Agreement (PPA) with Eskom, first producer and supplier of electricity in South Africa. ENGIE leads a South African consortium in charge of the solar park.
Kathu Solar Park is a 100 MW greenfield CSP project with parabolic trough technology and equipped with a molten salt storage system that allows 4.5 hours of thermal energy storage.
- Expected project lifespan: Build, own & operate with a 20-year PPA on a self-dispatch basis
- Total investment cost: 645 MEUR
- Financial Close and Notice to Proceed (NTP): Expected in Q3 2015
- First commissioning: Scheduled COD is NTP + 28 months
ENGIE in RSA
ENGIE is a long-term investor in South-Africa. We won the first large IPP tendered by the Department of Energy (Peakers project) and that is now under construction on two sites (Durban & Port Elizabeth). In 2012 ENGIE won the West Coast 1 wind farm project under the second round of the REIPPP. The 94 MW wind farm started construction in June 2013 and recently produced its first electricity in test phase, ahead of schedule. Commercial operation is expected in mid-2015. These projects are in line with our Group’s effort to become a leader in the transition to clean energy.