Two projects developed by Windlab have signed implementation agreements with South Africa’s Department of Energy and power purchase agreements with the national utility as part of the nascent renewable energy procurement programme.
Windlab partnered with Moyeng Energy to develop the 91MW West Coast One project near Vredenburg in the Western Cape. Moyeng Energy is a consortium involving Investec Bank and French energy company GDF Suez.
The 134.4MW Amakhala Emoyeni Phase 1 project is located between Cookhouse and Bedford in the Eastern Cape. Windlab partnered with Cennergi, a joint venture between Exxaro and India’s Tata Power Company, in December 2011 to complete development and prepare a successful bid in the second window of the Government’s REIPPP (Renewable Energy Independent Power Producer Procurement Programme).
Financial Close for both projects is now imminent.
Peter Venn, MD of Windlab Developments, says, “Over the next 36 months, more than 2500MW of green energy will come onto the grid, with around 52% of that to be supplied by wind. Projects developed by Windlab will supply 20% of that wind power.
Venn adds: “The Department of Energy must be commended for its role in driving REIPPP: It has approved 15 wind farms in the last two years, and the benefits of that will be felt for decades to come. The government’s renewable energy procurement programme is regarded as one of the most sophisticated in the world.”
Window 2 of REIPPP will yield R28bn in private investment, about half from local investors.
It couldn’t be happening at a more important time: in the last fortnight, peak demand was around 31 228MW, perilously close to Eskom’s capacity of 31 708MW.
Reserve margins – the amount of excess capacity in an electric system – should, by international norms, be in the region of 15%. South Africa, by contrast, has a reserve margin of under 1%. South Africa is constructing a 4800MW coal-fired power station that is suffering long construction delays and a 150% budget overrun.
Wind energy projects in the second window of the REIPPP will sell their electricity to Eskom at an average of 89 cents per kilowatt hour, compared to the first phase of the new Medupi coal-fired power station, which will start generating power at around 97c/kWh, according to the national energy regulator.
“Most types of renewable energy are much faster to construct than fossil-fired facilities. We urgently need every kilowatt of energy on the grid that we can muster,” says Venn. “The fact that wind technology is quick to construct as well as cheaper than new coal builds and reliable is simply a value-add, and it aligns perfectly with the National Development Plan.”
In addition, renewable energy projects under the REIPPP will make substantial investments in socio-economic and enterprise development in the areas surrounding the projects.