South Africa Approves $3.3 Billion of Renewable Energy Projects

South Africa approved 33.8 billion rand ($3.3 billion) for 17 clean energy projects in the third of five bidding rounds of a program to cut its reliance on coal.

The Department of Energy received bids for 6,023 megawatts of capacity and allocated 1,456 megawatts, Director General Nelisiwe Magubane told reporters today in Pretoria, the capital.

South Africa plans to add 3,725 megawatts of renewable energy capacity by the end of 2016 with five tenders. That may help state utility Eskom Holdings SOC Ltd., which supplies more than 95 percent of the nation’s power and uses coal for 85 percent of its generation, to meet demand as it struggles to pay for expansion in the continent’s biggest economy.

“Window 3 will contribute approximately 4.4 billion rand to socio-economic development, aggregating to a cumulative investment of 9 billion rand,” Energy Minister Ben Martins said in Pretoria.

Twenty-year power-purchase agreements with Eskom helped drive $5.7 billion of clean-energy investments to the country last year, or about a quarter of the total invested in sub-Saharan Africa, Bloomberg New Energy Finance data show.

Of the 17 preferred bidders named in the third round, seven will provide power derived from wind, six from solar photovoltaic facilities, two from concentrated solar and one each from landfill gas and biomass, the department said in a statement handed to reporters.

China Longyuan Power Group Corp., that country’s biggest wind farm operator, will jointly develop the biggest project awarded in this round, the Longyuan Mulilo De Aar 2 North Wind Energy Facility, which will have contracted capacity to supply 139 megawatts at 740 rand per megawatt-hour.

One megawatt of capacity is enough to supply 2,000 average European homes.

Copyright 2013 Bloomberg

Lead image: South Africa map via Shutterstock


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