Renewable energy power producer Scatec has signed power purchase agreements (PPA) for three co-located solar and storage projects with 1.1GWh of energy storage in South Africa.
The Norway-based company has signed the PPAs for the three Kenhardt projects in Northern Cape. The projects are providing dispatchable energy resources to grid operator ESKOM to help reduce shortfalls in capacity on the grid, procured under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
Scatec’s three projects, which pair 540MW of solar PV with 1.1GWh of battery energy storage system (BESS) capacity, will provide 150MW of dispatchable energy from 5 a.m. to 9.30 p.m. The BESS will enable the flexible dispatch of energy and allow ESKOM and Scatec to reduce the size of the grid connection needed to integrate the new resources.
The company’s announcement does not spell out the power of the BESS, while an announcement last year when it was awarded preferred bidder status said it would be a 225MW system.
They are the only fully renewable resources awarded PPAs under the RMIPPPP tender, and will provide power under a 20-year agreement. Scatec will cover all engineering, procurement and construction (EPC), operation & maintenance (O&M) and asset management services for the project.
Financial close is expected within 60 days of the PPA signature date (2 June) and construction will begin thereafter although an expected commissioning date hasn’t been revealed. When Scatec was awarded preferred bidder status, the resources were expected to be up and running by the middle of this year.
Scatec will own 51% of the equity in the project while H1 Holdings, its local Black Economic Empowerment (BEE) partner will own the remaining 49%. BEE is a government programme to facilitate broader participation of the black population in the economy to redress the lingering inequalities of apartheid. Standard Bank Group was lead arranger and debt provider.
Gas resources were the big winner in RMIPPPP, although up to 430MW/1,300MWh of energy storage was successful according to consultancy Clean Horizon’s analyst Corentin Baschet. The South African government is seeking to add more storage to the grid through other programmes too.
A separate programme by ESKOM, the Renewable Energy IPP Procurement Programme (REIPPPP), is solely for renewable energy resources and the two programmes together are expected to add about 1GW of storage to the South African grid.
Some 200MW/832MWh of standalone BESS projects at eight sites through REIPPPP were in final stage pre-contract discussions in March this year. And an even bigger round of procurement is expected to start in the next few months, Adam Terry, technical director at Harmattan Renewables, which is working with IPPs on projects in the country, said in a recent interview with Energy-Storage.news.
The standalone assets will provide national peak shaving services for four hours a day plus ancillary services and local support, Eskom said.