Siemens Turns to African Market with Solar and Wind Contracts for Mainstream Renewable Power

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Siemens AG (NYSE:SI) (Munich, Germany) has made a major move in the South African renewable energy market, as it expects the sector to grow strongly over the next few years--not only in South Africa, but also on the African continent as a whole.

The company has entered the South African renewables market where it already has a presence of over 150 years in other power segments, through contracts with a licensed independent power producer Mainstream Renewable Power Limited (Dublin, Ireland), Globeleq (London, England) and local broad-based black empowerment entities: Thebe Investments, Enzani and Usizo.

Mainstream has developed these projects over the past four years and was responsible for gaining all consents, grid connections, project finance, construction contracts, and equipment procurement. Mainstream also will manage the full construction program under the supervision of a joint steering committee with Globeleq. The projects have been developed with Mainstream's local partner, renewable energy developer Genesis Eco-Energy (Cape Town, South Africa), which has been active since 2001. The projects have a combined investment value of more than $630 million.

Siemens will be the engineering, procurement and construction contractor for two solar photovoltaic (PV) power plants, which will each have a capacity of 50 megawatts (MW). The sites for the two projects will be at De Aar and Droogfontein in the Northern Cape province, and both are scheduled to be connected to the grid in 2014.

"Barry Lynch, head of procurement and project delivery at Mainstream, says these will be the company's first solar PV projects and the first wind project in Africa," said Eddie O'Connor, the CEO of Mainstream.

"We have recently raised money on the world markets, which we are delighted to commit to developments in South Africa, and we look forward to having 238 MW of wind and solar plant operational in mid-2014."

Siemens also has been awarded the order to supply 60 wind turbines for the Jeffrey's Bay onshore wind power plant on South Africa's southeast coast. The turbines will have a capacity of 2.3 MW each, for a total of 138 MW, with rotor diameters of 101 meters. The company will install and commission the turbines and will perform maintenance on the installation for a period of 10 years. The long-term parts and services agreement for the project represents the first of its kind for Siemens wind services in South Africa. The Jeffrey's Bay project will be the largest onshore windfarm in the region.

Mainstream has a development pipeline of more than 15,000 MW globally. It engages in projects in Ireland, Chile, Canada and South Africa. The company is developing about 8,000 MW of offshore wind projects in England, Scotland and Germany, with 4,450 MW of secured grid connection for these offshore projects.

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