South Africa’s CSP future rests on grid, policy solutions

Source: CSP Today Global Tracker

South Africa CSP developers must work closely with state power utility Eskom to develop co-funding models for grid connections that will spur development in a market held back by weak state finances and uncertain capacity targets.

South Africa has seen a rapid expansion in renewable energy capacity since it launched its Renewable Energy Independent Power Producers Procurement Program (REIPPPP) in 2011.

A new draft Integrated Resource Plan published by the energy ministry on November 22 has excluded allocations for CSP plants from 2020, causing some concern in the industry.

Developers have argued that CSP can provide crucial energy storage capabilities and hope to introduce changes to the IRP plan during the consultation stage.

There are currently three 100 MW CSP projects under construction in South Africa and they are expected to come online in 2017-2018. Abengoa’s Xina Solar One, Engie’s Kathu and Emvelo’s Ilanga 1 will use parabolic trough technology and were awarded in the third round of the REIPPPP.

ACWA Power is also awaiting the signature of a Power Purchase Agreement (PPA) for its 100 MW Redstone project and completion of this plant will raise total installed CSP capacity to 600 MW.

REIPPPP round 3 projects

CSP projects allocated thus far are on prime sites with the best access to transmission capacity. All the projects are being built in the sundrenched Northern Cape Province which hosts 65% of the 2.9 GW solar power commissioned so far in South Africa.

Plant developers take on risks associated with connections to substations. Future projects will depend on required investment in South Africa's transmission grid, adding an additional level of complexity.

“The independent power project’s [IPP's] scope of work relates only to the connection of the CSP plant to the transmission network. Transmission infrastructure upgrade and maintenance is done by Eskom,” Mohamed Hoosen, CEO of Engie South Africa, told CSP Today.

Faced with ongoing financial difficulties, Eskom has not matched the expansion in generation capacity with necessary strengthening of the power grid, particularly in the sun-drenched Northern Cape province in the north-west, where PV capacity has soared.

The first three REIPPPP Bid Windows consumed much of the available transmission grid capacity in the Northern Cape, Eastern Cape and Western Cape, according to an analysis paper written by advisors to the government’s IPP Office and Eskom.

“There is an urgent need to create additional transmission grid capacity for the REIPPPP,” according to the analysis paper, originally published by Energize in June 2015.

Demand for projects continued to surge and renewable energy submissions were five-times oversubscribed in the REIPPPP bid round 4.5 held in 2015, Tina Joemat-Pettersson, South Africa's energy minister, said in March. Project submissions totalled 9.5 GW and 6.5 GW of this capacity was for projects in the Northern Cape province.

Required strengthening of the Northern Cape grid network had not been budgeted for in the regulated multi-year price determination (MYPD3) for 2017/18 electricity tariffs, Joemat-Pettersson said.

“Until more funds are made available for transmission projects, development costs and relevant capital costs to connect IPPs, private investment in the grid remains an option to address the funding and implementation constraints experienced,” she said.

Work underway

The most advanced of the round three CSP projects is Xina Solar One and the plant is expected to come online in the second quarter of 2017.

The project entered the commissioning phase in November 2016, Santiago Lopez Perez, Xina Project Manager, told CSP Today.

“Xina Solar One is now more than 95% complete. We are nearing the completion of the main activities for construction (mechanical, electrical, instrumentation and control) and we are in the commissioning phase,” he said.

Xina Solar One will feed power into the adjacent Paulputs substation via a short 3 km transmission line that took three months to build. The Spanish developer constructed, financed and will own and operate this new $5.4 million 220kV line, according to a project report by the African Development Bank.

Abengoa’s 100 MW KaXu, which entered operation in March 2015, already sends power to the Paulputs substation. The plant relies on a 220/132kV transmission line constructed by Eskom to connect the plant to the existing substation.

A second transformer was added at the substation to accommodate the new capacity. The transformer work was carried out by South African contractor Tyris Construction at a reported cost of close to 17.6 million rand.

Emvelo’s Ilanga 1 plant will be connected to the grid via a 400kV line to be built by Eskom, which will then be linked to the 132kV Gordonia Substation in the first quarter of 2017, according to Emvelo.

“The way to mitigate grid connection issues in the future is for the grid utility, Eskom, to implement its transmission plans faster by partnering with developers to build the network and hand over the built infrastructure to the utility,” Pancho Ndebele, Emvelo’s chief executive and chairperson of the Southern Africa Solar Thermal Electricity Association, said.

Future challenges

Grid capacity limitations are a concern for all types of renewable energy projects and this has prompted suggestions of new tariff mechanisms to ease grid shortages.

Nodal pricing could be introduced to support PV development in lower yield areas with less grid constraints and optimize the placement of wind and CSP plants, Corne van der Westhuizen, Project Development Manager at Juwi, said at the CSP today South Africa 2016 conference on June 8.

“As things stood at the end of 2015 there is seemingly a shortage of transformer capacity in the central Northern Cape,” van der Westhuizen said.

“There is approximately 1,300 MW available in the province; this does not yet consider the [2015] expedited round allocations [6,500 MW]. If you subtract these, there will be significant constraints on transmission lines in that area,” he said.

Prior to the recent IRP proposals, developers have faced a number of risks to project timelines. The round 4.5 bid round was expected to allocate 450 MW of CSP capacity but the results are yet to be announced.

In addition, state utility Eskom delayed the signing of the Redstone PPA, reportedly due to a weakening of the rand against the US dollar which pushed up the cost of the contract.

Despite regulatory uncertainties, South Africa has seen a high level of developer interest since the launch of the REIPPPP and some developers remain positive about the potential.

For Engie, South Africa remains a key market for new capacity, Hoosen said.

“Engie has been in South Africa for nine years now and we have every intention of continuing to developing power projects in the country,” he said.

J.v.G. Thoma GmbH is delivering a DESERT turnkey production line to Brazil, the first of its kind and hopefully the first in many breakthroughs to leave the factory floor on their way to the largest country in South America. With a capacity of 30 MW, this is a small semi-automatic DESERT production line, but still a flagship in terms of DESERT solar module production and electricity generation in the country, now fully functional and ready to start with operation.

The machinery consists of DESERT production machines for high-efficiency DESERT solar modules built specifically for extreme hot climate, such as can be seen in deserts or in tropical areas. Made solely in Germany and built using the latest in DESERT and TROPIC module production, the systems inlcudes all cutting-edge technology.

Certified DESERT solar modules, DESERT containers, DESERT power plants and DESERT manufacturing machinery built using pioneering DESERT and TROPICS technology are now fully set up, and ready to perform. But powering on the machinery has been a long time coming. Up until recently, this advanced piece of equipment had been waiting for clearance at a port in Brazil. Now that the formalities have been dealt with, both J.v.G. Thoma and its customer in Brazil can get production under way.

J.v.G. Thoma GmbH is a company whose vision has always been to harness the infinite power of the sun and convert it into an inexhaustible supply of energy. But a vision such as this requires global reach, and this project has opened new doors. Brazil is not only a gateway to South American cooperation, but also the launchpad to international reach and expansion.

Following the delivery of this initial order, J.v.G. Thoma GmbH will be looking forward to an ongoing collaboration with the Brazilian company. From setup and initial training to setting the scene for a ramp up, J.v.G. Thoma will be there to provide expertise and assistance. Moreover, the company will be jointly responsible, along with the client, for the successful integration of the DESERT solar module factory.

In the future, bigger DESERT power plants will be set up on Brazilian soil, and together with existing turnkey production systems, they intend to take up a large share of the products and assets this sector will possess locally. J.v.G. Thoma plans to build up a local network of sales agents that can extend a premium offering to neighbouring countries in South America. Eventually, the company hopes to be able to expand its customer base to clients in North America.

Hans Thoma, general manager from the Thoma-group, is eager to acquire a substantial market share in Brazil, a growing country with tremendous potential for solar energy output. Having complied with local official procedures (Inmetro, TÜV, Fraunhofer CSP) and cleared the way for future business collaboration, he expresses his hope that the solar industry will henceforth expand quickly.

”Being able to introduce Brazil to the infinite opportunities of a solar industry is a privilege for J.v.G. Thoma GmbH, and one that we are extremely grateful for. At the same time, this placed the ball squarely in our court, and the pressure to get the ball rolling quickly was high. Now that the lengthy initial formalities are out of the way, we can focus on making this project a success.“

The first DESERT solar module production in BRAZIL! Lets go ....
J.v.G. Thoma GmbH is delivering a DESERT turnkey production line to Brazil, the first of its kind and hopefully the first in many breakthroughs to leave the factory floor on their way to the largest country in South America. With a capacity of 30 MW, this is a small semi-automatic DESERT production line, but still a flagship in terms of DESERT solar module production and electricity generation in the country, now fully functional and ready to start with operation.

The machinery consists of DESERT production machines for high-efficiency DESERT solar modules built specifically for extreme hot climate, such as can be seen in deserts or in tropical areas. Made solely in Germany and built using the latest in DESERT and TROPIC module production, the systems inlcudes all cutting-edge technology.

Certified DESERT solar modules, DESERT containers, DESERT power plants and DESERT manufacturing machinery built using pioneering DESERT and TROPICS technology are now fully set up, and ready to perform. But powering on the machinery has been a long time coming. Up until recently, this advanced piece of equipment had been waiting for clearance at a port in Brazil. Now that the formalities have been dealt with, both J.v.G. Thoma and its customer in Brazil can get production under way.

J.v.G. Thoma GmbH is a company whose vision has always been to harness the infinite power of the sun and convert it into an inexhaustible supply of energy. But a vision such as this requires global reach, and this project has opened new doors. Brazil is not only a gateway to South American cooperation, but also the launchpad to international reach and expansion.

Following the delivery of this initial order, J.v.G. Thoma GmbH will be looking forward to an ongoing collaboration with the Brazilian company. From setup and initial training to setting the scene for a ramp up, J.v.G. Thoma will be there to provide expertise and assistance. Moreover, the company will be jointly responsible, along with the client, for the successful integration of the DESERT solar module factory.

In the future, bigger DESERT power plants will be set up on Brazilian soil, and together with existing turnkey production systems, they intend to take up a large share of the products and assets this sector will possess locally. J.v.G. Thoma plans to build up a local network of sales agents that can extend a premium offering to neighbouring countries in South America. Eventually, the company hopes to be able to expand its customer base to clients in North America.

Hans Thoma, general manager from the Thoma-group, is eager to acquire a substantial market share in Brazil, a growing country with tremendous potential for solar energy output. Having complied with local official procedures (Inmetro, TÜV, Fraunhofer CSP) and cleared the way for future business collaboration, he expresses his hope that the solar industry will henceforth expand quickly.

”Being able to introduce Brazil to the infinite opportunities of a solar industry is a privilege for J.v.G. Thoma GmbH, and one that we are extremely grateful for. At the same time, this placed the ball squarely in our court, and the pressure to get the ball rolling quickly was high. Now that the lengthy initial formalities are out of the way, we can focus on making this project a success.“

The first DESERT solar module production in BRAZIL! Let
Source: CSP Today