Engie SA expects to move forward with three South African solar projects this week as the nation struggles to accelerate a program to add renewable power.<\/p>\n
The French developer plans to sign power-purchase agreements for a total of 225 megawatts of solar projects after being selected as a preferred bidder as part of the so-called fifth bid window, according to Mohamed Hoosen, Engie\u2019s managing director for renewables in Africa, Middle East and Asia.<\/p>\n
South Africa picked 25 wind- and solar-power projects to be built by private developers last year to reduce the nation\u2019s reliance on coal for electricity and end rolling blackouts that are curbing economic growth. Those plans have faced various delays and challenges to reach financial close.<\/p>\n
\u201cIt\u2019s always a challenge — the market has changed fundamentally to how it was 18 months ago,\u201d Hoosen said in an interview, referring to factors including a surge in supply-chain costs.<\/p>\n
South Africa revised commercial close timelines for the projects chosen in the fifth bid window. It\u2019s since signed some agreements in a staggered order. Developers also await the selection of preferred bidders for the sixth bid window.<\/p>\n
The company remains interested in realizing more projects through the government program, Hoosen said. \u201cTo the extent that they bring these programs to market, we will be there to submit our bids.\u201d<\/p>\n
As part of South Africa\u2019s energy transition, about 53,000 megawatts of wind and solar plants will be required over the next decade as ageing coal stations, currently producing over 80% of the nation\u2019s electricity, are retired, according to state-owned utility Eskom.<\/p>\n
Job Creation<\/strong><\/p>\n Plans to switch from a dependence on coal mean South Africa, with one of the worst unemployment rates in the world, needs to replace jobs that would be eliminated. A proposed solution is building or assembling some of the equipment in the country.<\/p>\n \u201cThere is tremendous value in establishing a local base for manufacturing,\u201d though there are some preliminary conditions, Hoosen said. \u201cYou need the certainty and reliability of the deployment of renewables\u201d and you need to be competitive.<\/p>\n Engie has about 320 megawatts of renewable projects operating in South Africa, including two concentrated solar power stations capable of storing electricity for hours. That\u2019s giving way to the use of photovoltaic panels with batteries \u201cas we look at the evolution of technology and cost,\u201d Hoosen said.<\/p>\n
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