LONDON — 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.
Copyright 2014 Bloomberg
Lead image: CSP plant via Shutterstock