!Ka XU Solar One was one of the 28 renewable energy projects announced by the Department of Energy (DoE) in 2011. The total cost of the project was budgeted at R8.8 billion of which the DBSA provided funding of R2.0 billion. The project will be financed by debt and equity of which approximately 70% is anticipated to be raised as non-recourse project finance debt financing with the balance to be funded in the form of equity and shareholder’s loans.
The project entails the development, financing, procurement, construction, testing, commissioning, operation and maintenance by !Ka XU CSP South Africa (Pty) Limited of a green field solar power station installation with a 100 MW net power generating capacity, together with associated infrastructure and facilities. The project is located 40 kilometres from the town of Pofadder on the farm Scuit Klip 92 and will provide power into the Eskom Paulputs transmission substation distribution located approximately one kilometre from the project site.
A black economic empowerment workers trust will form a company to undertake operations and maintenance (O&M) services to the project company.
OBJECTIVE BEING ADDRESSED
The current energy demand in South Africa outstrips supply and therefore other methods of electricity generation have to be explored. South Africa has set a goal to achieve up to 17 800 MW of renewable energy by 2030 in an effort to reduce its dependence on oil and natural gas resources. The sponsors are co-developing this commercial solar generation facility in the Northern Cape Province. The facility being developed will use parabolic trough technology with a molten salt thermal energy storage facility that allows extending electricity generation up to 2.5 hours after sunset.
The project is at an advanced stage of development on all fronts. Project preparation activities such as contour mapping and geotechnical analyses have been completed. The environmental authorisations have been received. The site for the project has been purchased and registration into the name of !KA XU CSP South Africa (Pty) Limited will occur on ministerial approval of the subdivision.
OUTCOMES AND MEASURABLE IMPACTS
Once developed, the key components of the project will be:
• A solar field with parabolic trough collectors and the heat transfer system (HTS).
• A molten salt storage system or thermal energy storage (TES).
• A steam cycle with steam turbine generator.
• A cooling system.
• Other auxiliary equipment.
The solar thermal plant collects solar energy with the parabolic trough collectors and converts this energy into electricity in the steam cycle. The TES storage has a capacity to store energy for 2.5 hours during off peak hours and dispatch it during peak hours.
One of the main contractors, Abengoa Solar S.A, global leader in the development, ownership and construction of the solar power generation, has an excellent track record spanning approximately 17 years in the solar generation sector. Their key projects to date include:
• The only multi technology development in the 300 MW Solucar Platform in Seville which includes trough, tower and PV plants.
• PS 10 (11 MW) and PS 20 (22 MW) – the world’s first commercial tower plants located at the Solucar Platform.
• 150 MW (3 x 50 MW) trough plants in Spain.
• Solana 280 MW – the world’s largest trough plant located in the USA.
• The world’s first solar and gas combined plants through the 150 MW Hassi-R’mel.
• An integrated solar and gas combined cycle plant in Algeria and a similar one in Morocco.
• The first CSP plant in the United Arab Emirates through the Shams 1, a 100 MW plant in Abu Dhabi.
The loan period of 16 years including availability of grace periods is in line with typical development finance practice.
IMPORTANT LESSONS LEARNT AND CRITICAL SUCCESS FACTORS
Abengoa Solar S.A as the main partner and subsidiary in this project with its track record will definitely contribute positively to the success of the project. Solar energy can contribute significantly to addressing the current challenges in energy that Eskom faces. There is a notable growing need for countries to reduce their emissions and achieve greater energy independence while facing these factors:
• Increasing volatility in fossil fuel prices.
• Significant increase in energy demand and CO2 emissions in emerging countries.
• Decreased nuclear generation in the energy mix of developed and developing countries.
The most important factor that sets concentrating solar power apart from other forms of renewable energy generation is its dispatchability, or the ability to adapt production to the demand. Dispatchability is considered essential, and perhaps most valuable, for electricity systems. Having the ability to adjust energy generation to the demand curve has the benefit of being able to sell electricity to the grid at peak generation hours, with a resulting increase in price, and the ability to compensate for the effects of intermittent sources.
The Community Trust which has been formed comprises separate women, youth and general communities in Pofadder and Upington. Dividends flowing to the Community Trust over the life of the project will be applied towards local economic development beneficiary projects. The IDC is coordinating the establishment of the Community Trust and arranging the required equity funding.