Eskom Moves into Wind Power Development with Plans for 100-Megawatt Sere Windfarm

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--South Africa's state-owned power utility Eskom (Johannesburg) has signed power purchase agreements totaling 2,460 megawatts (MW) from projects created under the Department of Energy's Renewable Energy Independent Power Producer Procurement Program (REIPPPP).

Nersa, the national energy regulator of South Africa, has granted Eskom a license to develop its own 100-MW windfarm, called "Sere," at Koekenaap in the Western Cape province. Construction on the $266 million project will begin later this year, and full commercial operations will be achieved by the end of 2014.This will be a step forward for Eskom, as its power reserves are marginal and it is waiting for major baseload projects to come online.

The cost of power from the project will compare favorably with the amount per kilowatt hour (kWh) that the government would pay independent power producers (IPPs) in the first round of the REIPPPP. As projects for the second round were finalized at the beginning of the month, the cost had dropped to 9.5 U.S. cents/kWh.

In February, Nersa granted Eskom an overall tariff increase of 8% annually for the next five years, which would increase the cost of electricity in South Africa just a fraction by the end of March 2018.

The Sere project has been funded by development finance, with contributions from the World Bank, African Development Bank, Clean Technology Fund and the French Development Agency. The lowering of funding costs will bring the windfarm's final levelized cost to 8.19 U.S. cents/kWh.

The Sere project is Eskom's first large-scale renewable energy project. Preparatory work is under way on a 100-MW concentrating solar plant, which has been proposed for development near Upington in the Northern Cape.

Sere is expected to mitigate almost 4.7 million tons of carbon emissions over a 20-year working life. It is expected to produce 233,000 megawatt-hours, enough to power about 97,000 standard homes.

Siemens will supply 3-108-model wind turbines. The project will include the construction of a new substation and a 132-kilovolt distribution line, for which contracts are still to be awarded.

For related information, see May 13, 2013, article - Second Round of South Africa's Renewables Program to Add 1,044 Megawatts.

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