SolarReserve, ACWA Win Bid to Build South African Solar Plant

(Bloomberg) — The South African Department of Energy today
gave the go-ahead for SolarReserve Inc. and Saudi Arabia’s ACWA
Power to build a 100-megawatt solar power plant.

Acceptance of the bid means the companies can now proceed
to financial close, expected this year, and the signing of a
power-purchase agreement with state-owned utility Eskom Holdings
SOC Ltd. The Redstone plant, near Kimberley, is expected to
start working in early 2018, California-based SolarReserve said
today in a statement on its website.

“South Africa now has 700 megawatts of solar thermal
projects in various stages of development and at this rate will
have the third-largest installed capacity by 2020 after Spain
and the U.S. based on current developments,” Derek Campbell, a
Bloomberg New Energy Finance analyst, said today by e-mail.

The companies’ offer was accepted under the nation’s
Renewable Energy Independent Power Producer Procurement
Programme that requires applicants to bid on the level of
tariff, as well as value to the local and national economy.

“Redstone is now the cheapest in terms of tariff for solar
thermal in South Africa at a cost of $124 a megawatt-hour and
the overall project cost is also on the low side at $715
million,” Campbell said.

The plant will include a thermal energy-storage system to
help balance peaks between supply and demand. That means it will
provide “dispatchable power on-demand,” similar to a
conventional coal, oil, nuclear or natural gas-fired power
plant, without the emissions and fuel cost, SolarReserve Chief
Executive Officer Kevin Smith said.

The facility will create more than 800 jobs during
construction, according to the statement. It’s expected to
generate more than 6 billion rand ($520 million) of income tax
over its first 20 years of operation.

GDF Suez SA on Jan. 6 was invited by the Department of
Energy to enter into a 20-year power-purchase agreement for a
100-megawatt concentrated solar farm with Eskom.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Tony Barrett

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