South Africa looks towards the development of local content and the rapid construction of CSP sites whilst addressing the challenges of water scarcity and steel supplies.
By Tom Nevin
Extensive early work has already started on both of South Africa's pioneering CSP sites “to ensure a shorter construction period and to make sure we meet our June 2014 full power output completion date”, says Rentia van Tonder, head of Green Industries at South Africa's Industrial Development Corporation (IDC).
Under construction are a 50MW CSP tower facility near the town of Upington in South Africa's Northern Cape Province and a 100MW parabolic trough solar plant in the hamlet of Pofadder, about 100km to the west.
The projects are being funded by the IDC as a direct shareholder of 49% with 20% of that being a community trust funded by the IDC with Abeneer, a sister company to Spain's Abengoa Solar, taking up the remaining 51%.
“All of the finance has been committed and approved by the various financial institutions, including the project finance for the tower,” confirms Van Tonder.
The rand-dollar exchange rate is a constant roller-coaster ride, and the levelling out of the highs and lows over the nearly two year the life of the contract can only be described as challenging. “The way that power purchase agreements (PPAs) work is that on the day the PPA is signed an adjustment is made in terms of the exchange rate so there is some compensation, but the project must cover the risk, in essence leaving no risk on the government. It is budgeted for with a facility in place to cover ourselves in terms of the exchange rate risk.”
A drawback to having little rain and plenty of sunshine, such as prevail in dry and sunny climates like the Kalahari, is the scarcity of water and the value of that available. Upington taps into the Orange River flowing past the town as does the regional agricultural activity up and downstream. Large scale energy generators are notoriously and heavily water dependent so an issue uppermost is whether or not there's enough to go around. The Orange is South Africa's biggest waterway and it tumbles through the Kalahari as strongly and as surely as the Nile through the Sahara. Nonetheless, prudent water usage remains a priority, and the selected CSP production type sips instead of gulping.
“Part of our due diligence and approvals included studies on the water availability,” reports Van Tonder. “We're quite comfortable that the technology in the towers for example is more efficient, will use up to 80% less water and will recycle the water as well. It's one of the reasons we're so excited about the tower technology.”
Significantly, CSP's heat and energy storage current and potential capability is of considerable interest to the energy community, more specifically it seems to South Africa's department of energy (DOE) and its virtual power monopoly Eskom. The state owned utility has issued a request for information for the construction of a 100MW CSP tower facility, also at Upington, with particular attention to storage applications.
Exciting to the government, ever with its eye on South Africa's worrying 25%+ unemployment numbers, is CSP's potential for localisation in construction, manufacturing and operational phases.
“Just how much that will be in percentage terms depends on the definition,” says Van Tonder, “and if you look at the definition of the renewable energy programme at the moment, it does include such elements as consulting and construction work so that's more related to local spend, specifically local content. For the tower facility we submitted numbers to the Department of Energy that approach 43%. That's quite high and from here they can only improve. Employment opportunities will also score. Because we will be following a more condensed construction period the number of jobs created during the construction period has also increased.”
An early challenge in the construction phase is the sourcing of the of the steel required, more particularly for the trough plant at Pofadder, and even though South Africa is a significant steel producer, it is not price competitive. Indian producers are being investigated as a source of more compatible costs.”
Local content in PV vs CSP in solar power generation favours CSP at this early juncture. “If you don't source your PV panels or inverters locally then you won't have a high local content,” says Van Tonder. “We do have local PV manufacturers but they're small right now. They are expanding as we progress through the bidding rounds, so the South African PV manufacturing industry is developing.”
What is more, foreign and local PV companies have applied to set up fabrication facilities in the proposed 5,000MW solar park in the Upington municipal precincts. The South African Alternative Energy Association says such renewable energy companies as Solairedirect, China's Suntech Holdings and Yingli Solar have applied for a patch in the park. A critical issue facing new solar generating installers is whether or not locally made components will be competitive with imports. CSP is more local manufacture friendly, but nothing is ever straightforward.
“Local manufacture of glass is one of the challenges we have, and we at the IDC are currently investigating the setting up of a heliostat factory in Upington quite soon to supply the tower. Also problematic at the moment is the manufacture of the glass. The silica in the region contains a high quantity of iron and that downgrades the purity of the glass. So we're currently in some intense research to find ways of improving the purity of the local silica.
“As for trying to meet our localisation targets as quickly as we can, I think that what we'll see initially is an assembly-plant environment for those components that lend themselves to that procedure.”
Eskom proposes a 50MW tower facility, also at Upington, bringing to three the number of CSP installations delivering 200MW in output envisaged in the short term.
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