South Africa Awards a 100MW CSP Project to a SolarReserve-led Consortium

2015-01-12

The South Africa Department of Energy (DOE) awarded a 100MW Concentrating Solar Power (CSP) project to a consortium led by SolarReserve and International Company for Water and Power Projects (ACWA Power), the Saudi water and power developer, owner and operator. The project was developed in response to the DOE's Round 3 (CSP) Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The Redstone Solar Thermal Power project, with the lowest tariff bid to date from any CSP project in the country, is scheduled to achieve financial close later in 2015 and commence operations in early 2018.

The first of its kind in Africa, the Redstone Solar Thermal Power Project features SolarReserve's molten salt energy storage technology in a tower configuration with the capability to support South Africa's demand for energy when it's needed most - day and night. The 100 MW project with 12 hours of full-load energy storage will be able to reliably deliver a stable electricity supply to more than 200,000 South African homes during peak demand periods, even well after the sun has set. Fueled completely by the sun, with no back up fuel required, the project also features dry cooling of the power generation cycle as an important element to minimize water use. The project technology will be based on SolarReserve's Crescent Dunes project in the US, which is complete with construction and currently in final commissioning.

"Due to Redstone project’s fully integrated thermal energy storage, the plant will provide dispatchable power on-demand, just like conventional coal, oil, nuclear or natural gas-fired power plants, but without the harmful emissions or hazardous materials and without any fuel cost,” said SolarReserve's CEO Kevin Smith. “In addition, the project's delivered electricity price is the lowest of any CSP project in South Africa to date."

"This Redstone Solar Project together with our 50 MW Bokpoort CSP project in South Africa and the Noor1, 160 MW solar thermal power plant at Ouarzzate in Morocco, extends ACWA Power's success in solar energy on the African continent,” said Paddy Padmanathan, President and CEO of ACWA Power. “The Redstone Solar Project is another successful bid where we challenged ourselves to deliver the lowest tariff to date in the REIPPP program for electricity generated wholly with solar power but dispatchable reliably both at day and night; again demonstrating ACWA Power's commitment to reliably deliver electricity at the lowest possible cost. All aspects of the project, from development phase to construction and then operations, have been structured to ensure maximization of value retention in not just only the South African economy, but also within the local economy of Northern Cape Province recognizing the intrinsic value in co-developing local people along with this asset which will co-exist with the local community for decades to come.”

The Redstone Solar Thermal Power Project will be located in Postmasburg, near Kimberley in the Northern Cape Province, adjacent to the 75 MW Lesedi and 96 MW Jasper PV solar power projects successfully developed by SolarReserve and its investment partners. Together, the three projects comprise the world's first combined CSP and PV solar park with a total of 271 MW of generating capacity. Under the REIPPPP process, the projects ensure robust local participation and technology transfer, and are structured to exceed the minimum REIPPPP requirements for BBBEE (Broad-Based Black Economic Empowerment) equality on job creation, local content, ownership, management, procurement, and enterprise development. All of the projects, as mandated under the REIPPPP, set aside a percentage of total project revenues for enterprise and socioeconomic development which will be invested for the benefit of local communities.

The Redstone project will create more than 800 direct jobs during the construction phase comprised of craft workers on site and will also create significant additional jobs related to equipment supply, manufacturing, engineering, transportation and other services. Over 40% of the total project value will be provided by South African suppliers – a portion of which will support BBBEE activities. South African companies will provide investment in the project of at least R2.4 billion and the tax revenue forecast contribution for the Redstone project is estimated to be in excess of R6 billion in income tax over the first 20 years of operation. In addition, during the more than 30-year operating life, the project will expend over R150 million per year in salaries and other operating costs, including land, insurance, and maintenance activities.

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