Power utility Eskom has made a firm movement into the renewable energy space after securing a license for its R2.4bn wind farm located in Vredendal in the Western Cape.
Eskom announced yesterday that the National Energy Regulator of South Africa (Nersa) has granted a license for the project titled Sere opening the way for construction and commissioning by the end of 2014. The projects adds momentum to South Africa’s new movement into renewable energy space after government has let loose its independent power producer framework. This space is expected to see through projects valued around the R100bn mark and introduce 3 725 MW of new generating capacity.
“This is an exciting milestone in Eskom’s move towards a cleaner energy mix,” said Eskom Chief Executive Brian Dames. “Sere is our first large-scale renewable energy project. It demonstrates our commitment to reducing our carbon footprint and to investing in a sustainable energy future.”
The Sere wind farm which takes its name from the Nama word for “cool breeze” will generate up to 100 MW of power for the national grid. This will see Eskom avoid nearly 4.7-million tonnes of carbon emissions over 20 years.
Eskom said the project has been funded by a group of development finance institutions, including the World Bank, African Development Bank, Clean Technology Fund and Agence Francaise de Developpement.
“We are very pleased that we have been able to take advantage of attractive financing from international development finance institutions to construct the project at costs which compare favourably with the market,” Dames said.
Eskom added that levelised cost of the Sere plant compares favourably with the average of R1.14/kWh for the independent power producers procured in Phase 1 of the Department of Energy’s renewable energy procurement programme and the 89.7 c/kWh in Phase 2, reflecting Eskom’s lower cost of capital. The total overnight cost of the Sere project (calculated at $2516/kWh) is within the International Energy Agency benchmarks.
Eskom is fully supportive of the Government’s Renewable Energy Independent Power Producer (REIPP) programme, which will introduce 3 725 MW of new generating capacity (mainly wind and solar). Eskom has signed power purchase agreements with the independent power producers procured by the Department of Energy in Phases 1 and 2 of the programme and stands ready to connect the new producers to the national grid.
Eskom’s Sere wind farm will comprise 46 Siemens 2.3-108 wind turbine generators and is expected to deliver first power to the national grid in the first half of 2014, with full commercial operation scheduled by the end of 2014. The project includes construction of a new substation and a 132 KV distribution line. It will create approximately up to 170 direct jobs during the construction phase.
It has an expected operating life of 20 years, with average annual energy production of about 233 000MWh, enough clean energy to power about 97 000 standard homes.
Alongside the Sere project, Eskom has a 100 MW Concentrating Solar Plant project near Upington in the Northern Cape, which also has funding from development finance institutions. It has also installed solar photo-voltaic (PV) panels to provide auxiliary power at its head office and at two of its coal-fired power stations, with a view to rolling out solar PV across other facilities.