Two new wind projects on the cards for Eastern Cape

13/04/2010 at 4:27 pm Leave a comment

Independent power producer (IPP) Rainmaker Energy plans to add 610 MW of wind-generated electricity to South Africa’s power grid through the development of two new projects in the Eastern Cape.

The company was working on developing a 550-MW wind farm, called the Dorper project, near Molteno, and another 60-MW wind farm, called the AB’s project, near Indwe.

Technical services director Doug Jenman told Engineering News Online that the company expected to reach commercial close for the projects before the end of this year, and that it was targeting the middle of next year for the start of construction.

Environmental-impact assessments for both projects would likely be completed by the end of August, while a record of decision on the projects could potentially be issued by November.

The start of construction would, however, be dependent on the signing of offtake agreements, or power purchase agreements, said Jenman.

He noted that the intention was sell the electricity produced to the proposed new Independent Systems Operator (ISO), but added that its was also looking at potentially selling the power in the local area, as limited power was expected to constrain the economic growth in the province.

The introduction of an ISO, which would see the country move away from having State-owned power utility Eskom as the single buyer of electricity, was expected to level the playing field for IPPs.

“Wind projects such as these, with strong energy yields, will provide much-needed power to the Eastern Cape when power is needed, during the day in winter, and matching the energy profile. These projects will also provide a longer-term pricing stability to the electricity price,” Jenman said.

The construction of the AB’s project would take less than 12 months, while the construction of the Dorper project could take between 18 months and 36 months, depending on the requirements set out in the offtake agreements.

Jenman noted that it would cost about R25-million for each installed MW to develop the projects, with funding to be obtained through a combination of debt and equity from South African and international sources.

“We are running a competitive process and this has shown that there is more than sufficient appetite for these particular projects, provided there are bankable offtake agreements,” he commented.

Rainmaker Energy was planning to source the turbines for the projects from an overseas supplier, but would procure as many services, such as civils and electrical work, as possible, from South Africa and in the Eastern Cape.

The IPP had also created a skills transfer and development programme for the operation and maintenance of the wind farms.

This would boost job creation and skills development in the province, while ensuring the reliable operation of the equipment while local skills were being developed.

Edited by: Mariaan Webb


Entry filed under: Green Finance, Wind.

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