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Renewables repositioning to meet mining industry’s energy needs

WASHINGTON – It is increasingly clear that mining and renewable energy are two businesses that belong together and, yet, figuring out the nuts and bolts of getting projects off the ground is not always easy.

For many renewable-energy companies, the slow pace of approving projects poses an ongoing challenge. “We have the skills the mining sector needs. The issue is getting momentum behind the mining sector to believe in these projects,” RES Canada microgrids manager Douglas McAlpine said.

Mark Bongiovanni, mining and metals sales manager for Schneider Electric, in Canada, pointed out that generalisations were difficult to make owing to each mining company and even each individual mining site, operating under its own unique set of considerations.

He noted that the diversity of the cost of energy in each country was what was driving development. In companies where it was difficult to get energy to the mine site, whether it was diesel, gas or the electrical grid, there was increased interest in looking at how to generate power locally.

“Ultimately, it’s a value proposition that each company – and, in some cases, each site – needs to evaluate for its own needs,” Bongiovanni said.

HONING THE KEY MESSAGES

McAlpine emphasised the importance of continuing to clear up misconceptions around renewables.

One key message that still needed to be fully addressed was stability. “We need to overcome the perception that renewables are unreliable,” says McAlpine.

As renewables companies became better able to explain how intermittency could be managed, mining companies were growing more confident in the potential of wind and solar energy. “The most important message is that renewables can be a stable source of power,” he said.

Other important messages to convey were economic. McAlpine believed that renewables companies excelled at illustrating the benefits of solar plants or wind farms in terms of carbon savings and emissions reductions, but they needed to do an equally compelling job of explaining the dollars-and-cents equation for mining companies.

“Renewables are price competitive in a number of areas, particularly in the mining sector, in which you have isolated and remote mines,” he said. 

Bongiovanni agreed: “Mines want to reduce the cost of energy and they want reliability. If they can reduce the cost of energy and improve the reliability of their operations, it’s a very simple decision.” 

A MEETING OF THE MINDS?

Oleg Popovsky, global business development director for SunEdison and board member at American Vanadium, noted that renewable energy went through an identity crisis in its very earliest days.

“Renewable energy is this big, interesting animal. Is it going to be part of the technology sector? Or the clean-tech sector? Or part of the traditional energy sector? What is it?” he asked. “Well, it’s all of the above.”

Renewable-energy providers were less fragmented now than they were in the recent past, and Popovsky believed that the industry had evolved in other ways, as well, so that renewable energy “looks more and more like the mining industry”.

He explained that renewables companies operated within three main business stages, each of which corresponded to a stage in the mining industry. He likened development in renewable energy to the exploration stage of mining, and this was followed by an implementation stage in both industries.

As renewable-energy concerns increasingly turned to independent power producers (IPPs) to sell energy into the marketplace, what they were doing corresponded to the final stage in mining in which ore or minerals were sold to different industry players.

Popovsky believed that these business-cycle parallels “should make the renewables industry more digestible, or understandable, for the mining sector.” At SunEdison, for instance, “we have created a financial product to make renewable-energy projects align with the problems that mining companies are looking to solve.”

Specifically, he said, SunEdison built solar power plants on mining sites and then sold all the renewable power to the mining companies just as they would have sold any other type of electricity.

Practically speaking, renewables companies were broadening the scope of their businesses to perform energy management functions – everything from energy storage to the control systems that regulated renewable energy and fossil fuel sources.

McAlpine emphasized that these new areas were applicable to mining. “We’ve been evolving into those areas because we thought they’d be globally significant, not just significant for the mining industry, and it just so happens that these are some of the key things in the mining sector, too.”

Mining companies were undergoing a transformation of their own. Schneider Electric’s Bongiovanni pointed out that ten years ago, the largest mining companies dominated the industry out of a prevailing belief that “bigger was better.” Today, he said, “better is better,” meaning that those mining companies able to innovate and produce at a lower cost were going to wind up being winners. Given this new dynamic, the mining industry was now far more ready to listen to how renewable-energy companies could help lower energy costs and solve other problems that mines might be facing.

Along similar lines, Till Krumbholz, sales manager for the energy sector’s smart generation solutions at Siemens AG, had found it helpful to delve into the financial situation of the mining industry, in order to provide solutions that were mutually beneficial. Specifically, he noted that mining companies were keen to reduce their project risk, and therefore were highly appreciative of the performance guarantee solution that Siemens offered.

Chris Matthews, new business manager at Mainstream Renewable Power, noted that the business model set forth by purveyors of renewable energy had changed because mining companies had baulked at investing in generation equipment.

The solution? Instead of selling mines a wind farm, companies like Mainstream realised that it was far more appealing to sell them a power purchase agreement, or PPA. “Nowadays,” explained Matthews, “developers are approaching mining companies and saying, ‘We’ll build it for you, and we’ll finance it. But you have to agree to buy the power.’” He continues: “That’s a much more appealing prospect for a mining company, particularly nowadays when mining companies want to keep things off the balance sheet.” 

Matthews also saw renewable providers changing to adapt to a behavioural issue characteristic of many mining companies. Because most mining companies made decisions slowly, Mainstream had found that for renewables projects, especially hybrid projects in Africa, it often made sense to wait for the mines to come to the renewables company, rather than the other way around.

David Willick, commercial director in North America for GE Mining, was seeing “a risk-sharing appetite” from mines uneasy with the idea of assuming the full capital expenditure burden of installing and commissioning a renewable-energy solution. “They’re looking for a third party to put up a power generation system – so they can essentially buy power by the hour.”

This desire for partnerships came out of the fact that mines were, by definition, temporary ventures that would eventually be depleted. Given this central fact, it was no wonder that mines were concerned about investing in renewable energy when they might not be working at a given site long enough to reap the full return on investment. Willick, therefore, saw potential in partnering with local communities: “If we start working together and there’s some type of cost- and risk-sharing, the neighbouring communities can benefit longer term. And that could make it more attractive for the projects to proceed in the shorter term.”

WHAT THE FUTURE WILL BRING

Many experts were convinced that energy storage was a critical component for improving renewables penetration at a mine site. Willick noted that GE had an energy storage solution that allowed mines to put power into a storage facility when the wind was blowing or the sun was shining, but the mine was consuming less energy than the power system was generating – and then drew from that power later, when energy was needed again.

He also pointed out that technological innovations would help make the renewables equation even more attractive for mines. “Mines operate in challenging geographical locations with significant obstacles to overcome, whether it’s extremely high rock-face temperatures or extremely cold ambient temperatures,” Willick said. He pointed out that technology advances would prevail to increase the renewables penetration rate and drive down costs for mines.

That renewable-energy companies had been able to quickly evolve to meet the needs of mining companies suggested that larger renewable-energy projects within the mining industry would come to pass in the not-too-distant future.

McAlpine, for instance, was sanguine about the prospects of larger-scale projects being commissioned in the next two to three years. “Mines looking at these types of projects want to install larger projects. The desire is there,” he said.

He, therefore, believed that 10 MW projects would start to be built soon instead of the one- or two-megawatt pilots generally seen today, although he expected the initial rate of uptake for these sizable projects would be moderate.

This positive momentum would also help with the chicken-and-egg situation that had delayed progress for quite some time: mining companies were reluctant to invest in renewable-energy projects without a proven track record, and renewable-energy providers could not demonstrate success until mining companies started to take the plunge and try their solutions.

“One of the big problems has been how the mines perceive renewable energy,” McAlpine concluded. “Once they can visit and take a look at these plants operationally, they’ll be a lot more confident proposing them for their mine sites. They’ll start to understand the risks and won’t be so concerned.” 

Meet the mines seeking renewable partnerships and the energy providers providing solutions at the Renewables and Mining Summit and Exhibition, October 15 to 16, Toronto.

New Study Reveals the Truth About Wind Turbines and Bird Deaths

Naysayers like to point to wind turbines as brutal bird-killing machines, wiping out huge populations of birds, but new research sheds some new light on the controversy.

According to a massive study supported by the American Wind Wildlife Institute, wind turbines account for around 214,000 – 368,000 deaths each year. While any death is something to be avoided, that number is tiny compared to the fatalities from collisions with radio and cell towers, which kill 6.8 million birds every year.

The study focused on small passerines in North America and the evidence shows that just .01% of those birds collide with wind turbines. The neighborhood cat causes far more damage to bird populations, with cats killing 1.4 to 3.7 billion birds each year. At the same time, the National Audubon Society released findings showing that over half of all bird species in America are threatened by climate change, which makes alternative energies like wind even more important for preserving overall bird populations.

Related: Utility Company Pays $1 Million in First Fine for Wind Farm-Related Bird Deaths

The AWWI will sponsor another study, this time to examine the impact that wind turbines have on larger birds, like hawks and eagles, and prairie birds. But one thing is already certain: of all the many threats facing birds today, wind turbines are not high on the list. Climate change, on the other hand? That’s something to worry about.

WIND FARM TAKES CENTRE UNDER THEIR WING

THE Jeffreys Bay Wind Farm donated R254300, including a car, to the On Eagles Wings Multi-Purpose Centre in Pellsrus, Jeffreys Bay.

Founded by pastor Mercy Cwayi in 2005 who experienced a traumatic childhood, and supported by the Department of Social Development, the centre offers counselling, education and life skills to women and children experiencing domestic violence and rape. This is by no means a simple undertaking considering that the community lacks sufficient support structures and is plagued by drug and alcohol abuse.

“We are grateful to women like Cwayi who take care of the many vulnerable women and children in our communities. Their compassion and strength help lift up those who are in need of care,” says Marion Green-Thompson, Economic Development Manager for Jeffreys Bay Wind Farm.

“Our development programme aims to positively impact the communities in Jeffreys Bay, Humansdorp, Hankey and Patensie areas, with a particular focus on education and health.”

Cwayi says: “We now have extra “legs” to reach community members and offer support to domestic violence victims.”

According to her there are exciting plans in the pipeline for the centre. “We hope to establish satellite branches in Patensie, Thornhill and Blomplaas, as well as to enable our social worker and trauma counsellor to visit community members in those areas.

“We further dream of opening a house for young unwed pregnant mothers who have been cast off by their families – offering a safe place and caring environment, while teaching them valuable skills to become independent.”

According to Social Development District Manager Zandisile Tafeni, Government cannot deal with social ills on its own. “We have limited resources, and are therefore grateful to see companies like the Jeffreys Bay Wind Farm giving back to the community.”

PE manufactured wind tower transported to wind farm

DCD Wind Towers has officially completed its first in-house manufactured wind tower at its R300m facility at the Coega Industrial Development  Zone.

The massive tower was transported on Thusday to the Grassridge Wind Energy Facility on the outskirts of Nelson Mandela Bay.

The DCD Wind Towers manufacturing facility is a joint initiative between the DCD Group, the Industrial Development Corporation and the Coega Development Corporation.

The facility was specifically established in the Coega IDZ to support the localisation of wind tower manufacturing in South Africa, which essentially ensures the long-term and sustainable creation of an estimated 150 to 200 operational positions and 628 construction jobs.

DCD Wind Towers general manager Gerrit Viviers notes that the direct operational jobs created through the establishment of the DCD Wind Towers factory include; boilermakers, shot-blasting operators, cutting operators, chamfering operators, roller operators, coded welders and fitters.

"What's more, a number of unskilled and semi-skilled individuals have been employed for sand blasting, painting and oxy-fuel cutting. The benefits to the local economy will penetrate beyond local skilled jobs and training to include logistics opportunities and additional value chain opportunities, thus creating a new industry in the Eastern Cape, Western Cape and Northern Cape too," he explains.

DCD Wind Towers is also contributing positively to sustainable and renewable power generation, as set out by the Department of Energy's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). DCD Wind Towers has already signed co-operation agreements with the turbine manufacturers that have been successful in Round 2 of the REIPPPP.

The DCD Wind Towers factory is expected to manufacture between 120 and 150 towers per year for the successful bidders in the REIPPPP programme. These towers will be manufactured to the highest international standards of quality and to exact OEM specifications, while remaining uniquely local.

CDC head of marketing and communications Ayanda Vilakazi, notes that the DCD Wind Towers manufacturing facility will diversify the traditionally automotive sector reliant Nelson Mandela Bay industrial base. "We want to attract investors to the Coega IDZ who are able to add value to the supply chain and align with national government's drive for localisation of manufacturing, especially in the renewables sector where there are many gaps for high-tech innovation and manufacture. A prime example of the success of this approach is DCD Wind Towers."

IDC senior account manager for the metal, transport and machinery products unit, Joseph Sithole, believes that the manufacturing sector is of tremendous importance to South Africa's long-term economic prospects, and suggests that the establishment of the DCD Wind Towers manufacturing facility is the first step in boosting investor confidence within the renewables sector.

Honda Twin Wind Turbines

Twin Wind Turbines Outperforming Expectations at Honda Transmission Plant

Just six months after the landmark installation of two power-producing wind turbines at Honda Transmission Mfg. of America, Inc., the turbines are producing more renewable, low emissions electrical power than was anticipated when the towers went into operation in January.

The wind turbines have exceeded the projected power output figures by 6.3 percent, and have contributed toward reducing the CO2 emissions of power production, helping Honda (NYSE: HMC) reach its voluntary goals to reduce the environmental impact of its products and manufacturing operations by 2020. This includes a 30 percent reduction in CO2 emissions from Honda products, and significant CO2 reductions from the company’s plants and other operations, compared with year 2000 levels.

The two turbines, standing 260 feet tall with 160-foot blades, were initially projected to produce upwards of 10,000 megawatt hours (MWH) of electricity per year, accounting for approximately 10 percent of the plant’s annual power needs. The turbines have outperformed company projections in four of the six months since operation began. At their highest output, the turbines provided 16.26 percent of the plant’s power requirements for the month of April.

“We are extremely pleased with the performance of the wind turbines’ production over their first six months,” said Gary Hand, Vice President of Honda Transmission Mfg. of America.

The turbines’ operation has exceeded the projections established during the project development.

The installation of the turbines makes the Russells Point, Ohio plant the first major automotive facility in the United States to receive a substantial amount of its power from on-site wind turbines. The project was developed and installed by Juhl Energy from Pipestone, Minnesota. The two turbines are owned by ConEdison Solutions.

“We are pleased to observe the performance of the two on-site wind turbines are achieving results over and above what Honda had anticipated. From the outset, we were confident that the site location selected would allow the GE turbines to produce a significant amount of the facility’s’ energy requirements,” stated Tyler Juhl, Vice President of Operations for Juhl Energy.”

“ConEdison Solutions takes tremendous pride in our commitment to customers, and we are proud to be helping Honda implement its innovative energy program at Russells Point,” said Michael W. Gibson, Vice President of Energy Services at ConEdison Solutions.

With this initiative, Honda has set an excellent example for the American manufacturing sector, and we are gratified that they have been pleased with its success.

To achieve their new environmental targets, Honda is accelerating its efforts to advance the environmental performance of its products, and its operations throughout North America. The wind turbine project is among a number of other initiatives at Honda plants to reduce energy use and waste from manufacturing operations.

Honda Environmental Leadership

Based on its vision of “Blue Skies for our Children,” Honda is working to advance technologies that address society’s environmental and energy concerns through a diverse lineup of products and technologies, including more fuel-efficient gasoline engines, natural gas, hybrids, plug-in hybrids, battery electric vehicles (BEVs) and electric vehicles (FCEVs).

Today, Honda is targeting a 30-percent reduction in CO2 emissions from its automobile product lineup by 2020, compared to 2000 levels. In pursuit of its vision for a zero-carbon future, the company is advancing electromotive technologies in many forms, and will introduce an advanced new fuel cell car in 2015.

In keeping with its commitment to produce vehicles with the lowest CO2 emissions at plants with the smallest environmental footprint, the company is broadly addressing emissions, energy, water use and waste in all phases of its products life cycles. In the manufacturing realm, this includes a 95 percent reduction in waste sent to landfills in North America. Honda is working to extend its “green factory” and “green purchasing” initiatives to its more than 650 parts suppliers in North America and is also pursuing more environmentally responsible business practices among its U.S. dealers.

Honda is also demonstrating its vision for zero-carbon mobility and living with the creation of the Honda Smart Home US, in Davis, California, which was opened in early 2014 and is designed to operate with half the energy use and CO2 emissions of a typical home in that region.

About Honda

Honda (NYSE: HMC) established operations in America in 1959 and now employs more than 39,000 associates in its North American sales, R&D and manufacturing operations with total capital investment in North America exceeding $22 billion.

Based on its longstanding commitment to “build products close to the customer,” Honda operates 16 major manufacturing facilities in North America producing a wide range of Honda and Acura automobiles, automobile engines and transmissions, Honda all-terrain vehicles, power equipment products, such as lawn mowers, mini-tillers and general purpose engines, and the HondaJet advanced light jet.

Eight Honda auto plants in the region, including four in the U.S., have the capacity to produce 1.92 million automobiles each year. In 2013, more than 94 percent of the Honda and Acura automobiles sold in the U.S. were produced in North America. Those plants today manufacture 11 different models, including four passenger cars and seven light trucks using domestic and globally sourced parts. A fifth U.S. auto plant, the Performance Manufacturing Center, is under construction in Marysville, Ohio, and next year will become the exclusive global production location for the next generation Acura NSX supercar.

Honda also operates 16 major research and development centers in the U.S. with the capacity to fully design, develop and engineer many of the products Honda produces in North America.

New power producers overwhelm ‘weak’ grid

THE government’s plan to bring more power into the national grid through procurement from independent power producers (IPPs) has a hit a technical obstacle — Eskom cannot connect all successful projects from the third window of the renewable energy bid until the grid is strengthened.

The procurement of energy from IPPs is the quickest way to increase SA’s energy supply, which will be precarious for the next five years.

Both Eskom acting CEO Collin Matjila and Public Enterprises Minister Lynne Brown have emphasised the importance of IPPs in closing the power gap.

Eskom has successfully facilitated the connection to the grid of 21 renewable IPP projects from two earlier windows, which will provide 1,076MW.

Just more than 467MW of this is now available to the system. An additional 17 renewable projects were approved in round three, to deliver 1,456MW.

But growing congestion on the grid as more producers begin to feed in at different points, insufficient investment in the backbone of the grid, and a failure to consider in advance the technical difficulties of connection for some of the projects have led to the finalisation of round-three projects stalling.

Because of the technical difficulties with connection to the grid, several bidders have received quotes for connection that are far higher than Eskom indicated at the start of the bid process last year. This has led to disputes, with the result that many round-three projects are unable to reach financial closure, a prerequisite for construction to begin.

Department of Energy acting director-general Wolsey Barnard said in an interview on Wednesday that the problem was primarily "a technical one". It was not possible to know at the start of the bidding process which projects would be selected and which would be technically difficult and therefore also more expensive to connect to the grid, he said.

"The delay is caused by technical issues. As Eskom works with very tight budgets and a tight timeframe, if there is something that they haven’t had on the radar when the bids close, they can find themselves with too many bidders that are all technical problems for them," Dr Barnard said.

The department evaluates and selects projects, but connection to the grid and the purchase of power are handled by Eskom.

Dr Barnard said the difference between the cost of connection at the start of the bidding and the cost once all the information was available at the end, had led to "quotations which some of the bidders did not agree with".

South African Photovoltaic Industry Association chairman Davin Chown said the variation in the costs for preferred bidders were from 8% to 70%. Because bidders were selected on price, no account was taken in the selection stage of how difficult or practical it was to connect to the grid.

"The priority for South Africa, given the crisis we are in, should be to award the projects that are quickest to connect," Mr Chown said.

The understanding had been that bidders would do the "shallow reinforcement" of the grid at substation level and Eskom the "deep reinforcement" further up the grid. "Eskom are now saying they have to look for more money to upgrade some parts of the grid."

University of Cape Town Graduate School of Business professor Anton Eberhard said it was in the deep connections that the grid needed strengthening.

"Eskom hasn’t invested sufficiently in strengthening the backbone to evacuate power. It is an issue of lack of co-ordination in planning and Eskom not taking care around preparing for the IPPs," he said.

Democratic Alliance energy spokesman Lance Greyling said the urgency of connecting IPPs to the grid was underlined by the recent news that the performance of Eskom’s fleet had deteriorated badly.

Jeffreys Bay Wind Farm Powers Up

Over the past year, travellers on the N2 passing the turnoff to the surfing paradise of Jeffreys Bay have noticed the appearance of 60 space-age wind turbines towering above the landscape.

Social media reaction to the turbines, covering 3,700 hectares, has mostly been “enormously positive”, says Mark Pickering, GM of Jeffreys Bay Wind Farm.

Mikael Karlsson, CEO of the farm’s developer, Globeleq, asks: “What would you rather have: wind turbines or the plume of smoke from a coal-fired power station?”

Whatever one might think of the visual impact, the benefits of the wind farm, the biggest in Africa , are wide-reaching.

It represents income for the local community; additional and clean electricity for the country; technological and skills development, and a positive experience for the wind farm’s foreign developers that is encouraging them to invest more in South Africa.

The shareholders in the R3bn wind farm are a consortium including Globeleq, an independent power producer focused on Africa and the Americas; Old Mutual’s Ideas Managed Fund, in which local pension fund money is invested; black-owned Thebe Investment Corporation; a global renewable energy developer, Mainstream Renewable Power; the Amandla Omoya Trust, a local community entity with a 6% stake; Enzani Technologies and Usizo Engineering.

The farm was funded partly through equity and partly through debt. The lead arranger was Absa Capital. It has taken only three years from the consortium being awarded the project in the first bidding round of the renewable energy independent producer programme to bringing it into production on time and on budget in May.

Department of Energy deputy director-general of energy programmes and projects Wolsey Barnard said at the wind farm’s inauguration ceremony on Wednesday that South Africa has 14 active independent power producers.

About 1,000 MW of renewable power is due to come on line by the end of this year — there are 19 other projects under construction.

Dr Barnard says Energy Minister Tina Joemat-Pettersson will shortly announce the composition of an energy advisory committee, including a broad spectrum of energy experts. The government understands that it needs to facilitate, not hamper, energy projects.

The Jeffreys Bay Wind Farm can generate up to 138MW of electricity when all its turbines are operating at full speed. Eskom’s total power capacity is about 42,000MW.

Construction manager Tom Thoroughgood says the plant is expected to produce on average 41% of its maximum capacity, given the vagaries of wind.

Each turbine at Jeffreys Bay has an 80m tower, three 49m-long blades , a nacelle containing the generator and gearbox, and a transformer box on the ground . The power is fed into a 132kV transmission line from a substation built to Eskom specifications .

The land the turbines straddle is leased from eight farmers. At peak construction there were 602 people on site, of whom 45% were locals . In its operating phase the wind farm will employ only 11 people but the community will receive dividends to spend on development projects.

The minimum local content requirement in round one was 25%, achieved through the project’s civil works, cabling, transformers, substation and project management, says Mr Pickering . In subsequent bidding rounds, local content requirements have increased, encouraging the growth of new manufacturing industries .

Mainstream CEO Eddie O’Connor says the company will participate in the fourth bidding round, even though the price for renewable energy has fallen “dangerously low” since the first round as a result of increased competition .

Last year, another consortium including Mainstream was awarded 360MW of wind energy projects . It will finalise funding later this year and start construction soon afterwards. These projects will bring Mainstream’s investment in renewable energy in SA to R9bn. Its projects in the construction or development phase total about 5,000MW of power.

Mr Karlsson says there are several factors behind the success of the Jeffreys Bay Wind Farm.

The government provided clear and transparent procurement rules and worked with local and international advisers to ensure that the contracts attracted capital.

The private sector also played a role, through the consortium investing part of the capital and the community welcoming the project, he says.

Author: Charlotte Matthews
Source: BD Live

Renewable energy projects deliver power to Eskom REIPPP initiatives

Standard Bank has been instrumental in funding more than 940MW of renewable energy as part of Eskom’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP) initiated by government. Of these projects, three were connected to the Eskom grid in 2013 bringing 121.5MW of renewable energy production to the national grid. This is enough to power over 65,000 homes.

“The drive towards renewable energy is developing an entirely new energy market in South Africa, which requires both specialist skills as well as innovative funding models,” said Rentia van Tonder, Head of Renewables for Standard Bank.“ Given that these projects are greenfield investments for a newly-created consortium with  own equity, we opted for a project finance model with a fairly long repayment term as the facility is effectively unsecured backed by a 20 year PPA supported by the SA government.”

The Standard Bank-funded wind farm project in South Africa’s Eastern Cape Province has become the first of Eskom’s REIPPP initiatives to reach financial close in late 2012 and begin successfully delivering power to the national grid in 2013.

The 27MW (MW) MetroWind Van Stadens wind farm project, which was built at a total cost of R599m, is projected to have a 20-year life span and deliver 80,000MW hours of electricity a year to between 5,000 and 6,000 households in the Nelson Mandela Bay Metropolitan Municipality. Standard Bank concluded an agreement in October last year to provide R450m in debt financing to a consortium comprising Basil Read Energy, Afri-Coast Engineers, Old Mutual, Spilled Water Renewable Energy and the Van Stadens Community Trust, for the construction of the project.

The wind farm consists of nine wind turbines situated in the Van Stadens and Blue Horizon Bay communities and will produce enough power to meet almost 50% of Nelson Mandela Bay’s target of generating 10% of electricity from renewable sources. This development will offset approximately 80,000 tons of carbon dioxide emissions a year as well as offset the use of 80 million litres of water that would have been used for power generation from coal fired power plants  in the process. The nearby settlements of Fitches Corner and Witteklip have already benefited from the project thanks to the installation of solar-powered street lights in their communities.

“While this is a landmark project for the development of sustainable wind-powered energy in South Africa, it is also an important contributor to social upliftment in the area.” said Ms van Tonder.

As lead arranger and underwriter of the transaction Standard Bank was able to call on its strategic relationship with Industrial and Commercial Bank of China (ICBC) for the provision of over R190m for the project’s financing.

Standard Bank was also the sole mandated lead arranger and underwriter of both the Herbert and Kalkbult renewable energy projects in South Africa’s Northern Cape Province. Herbert is a 22 MW photovoltaic project that signed power purchase agreement with Eskom. It became fully operational on 7 April 2014 but has been producing early operating revenue since November 2013. Herbert is owned by AE-AMD Renewable Energy (Pty) Ltd, Old Mutual Ideas Fund, Tenesa, Exoport and the Herbert Educational Trust No 1, a local community trust. The construction of Herbert was completed on time with SunPower as the Contractor and module supplier. SunPower will also be responsible for the operations phase of Herbert.

The third commissioned plant, Kalkbult is a 72.5 MW photovoltaic power project that will produce clean energy that will also be sold to Eskom. The project, whose shareholders include Scatec Solar AS, Norfund, Old Mutual Ideas Fund, Stanlib, Simacel and the Kalkbult Local Community Trust, has been connected to the grid since September 2013 and will provide Eskom with up to 137,000,000kwh of power per annum, which is enough electricity to supply 33,500 households per annum. The Kalkbult project was one of the first renewable energy projects under REIPPP to connect to the grid and begin supplying clean energy to Eskom.

The Untapped Potentials Of Wind Energy

VENTURES AFRICA – What is one of the most wasted sources of energy – a sustainable approach for delivering electricity to off-grid villages across the continent – it must be wind energy.

In the light of the global recognition for delivering electricity beyond city and industrial boundaries, EnergyNet has partnered with ‘Wind for Prosperity’, a Vestas initiative to deliver electricity to the poorest off-the-grid citizens across Africa.

More than 1.3 billion people across the globe lack access to affordable and reliable electricity. This has created a systemic and colossal backlog of demand on grids that only support urban and peri-urban areas. ‘Wind for Prosperity’ seeks to support government’s plans for industrial electrification by delivering electricity beyond the grid. Africa needs no less than $40 billion to supply at current rates of electrifications and this must be scaled to meet off-grid supply plus infrastructure.

Africa's most underused energy source has the potential to greatly reduce energy deficit across the continent

Africa’s most underused energy source has the potential to greatly reduce energy deficit

‘Wind for Prosperity’ will create a world of new opportunities by accelerating access to clean water, healthcare, irrigation, education, communications infrastructure, and other social and economic benefits. It is different to most other corporate initiatives to alleviate poverty as the concept is commercially based and is more scalable and sustainable than efforts purely reliant on philanthropy and donations – it is business as a force for good.

Morten Albæk, Group Senior Vice President and CMO of Vestas commented “Every day at Vestas we think about solutions to make the world’s energy mix more sustainable and maintain our position as the global wind leader and technology developer. With more than 61 GW of installed wind turbines, comprising close to 19% of total global capacity, we understand the importance of delivering viable energy programmes and we’re delighted to partner with EnergyNet in Africa to increase the chances of delivering electricity to important corners of the continent, often overlooked due to challenging financial conditions.”

A study by the World Future Council (WFC) and the Heinrich Böll Foundation found that Renewable Energy Feed-in Tariff (REFiT) policies are a favourable tool to cascade renewable-energy development in Africa.

REFiTs has successfully increased the use of renewable technologies worldwide, with 65 countries implementing some form of a REFiT by 2012. This drove 64% of global wind installations and 87% of the photovoltaic capacity installations worldwide.

EnergyNet’s MD Simon Gosling added, “The potential for such an off-grid solution to support government objectives is huge both economically and politically and we’re delighted to partner with Vestas on such a potentially game changing venture; indirectly supporting industrial development, directly supporting local development.”

Excitingly ‘Wind for Prosperity’ also has the ‘EnergyNet Student Engagement Initiative (ESEI)’ which supports African student engineers from across the continent.

Nelson Mandela Bay on track as Africa’s ‘Green’ Energy hub

The Coega Development Corporation (CDC) – operator of the Coega Industrial Development Zone (IDZ) and the Eastern Cape’s leading catalyst for socio-economic growth – announced recently that Nelson Mandela Bay is well on its way to become the country and continent’s hotspot for ‘green’ energy components manufacturing and technologies.

This according to Sandisiwe Ncemane, CDC investment manager: energy division. In its 2013/14 financial year, the CDC secured foreign investments close to R1bn for ‘green’ energy component manufacturing in South Africa.

Investments attracted to the Coega IDZ in the last year include JA Solar and Powerway’s now operational R660m solar module manufacturing facility, and a R127m renewable energy components manufacturing facility owned by Powerway/Sungrow which will commence with production within the year.

A new ground-mounted solar energy harvesting plant was also commissioned for the Coega IDZ and announced by the CDC earlier this month.

The R300m DCD Wind Towers production facility also went online this year, and the plant will have an estimated annual production output of 110 and 120 wind towers.

Ncemane  said, “The CDC profile as a green technology manufacturing hub of South Africa has gained traction in renewable energy projects.  On-grid and off-grid green energy component manufacturing which includes, among others wind towers and solar photo voltaic (PV) panels in the Coega IDZ is alive and well.”

“These investments are critical in supporting 64 renewable energy projects valued at R100-billion approved by South African government since 2011, which will produce 3 900 megawatts (MW) for South Africa’s energy mix through wind, solar photovoltaic and concentrating solar power,” she said.

The organisation remains bullish over the future of alternative energy component manufacturing investments in the new financial year, according to Dr Ayanda Vilakazi, CDC head of marketing and communications.

“New legislation, government’s robust renewable energy strategy and other value propositions inherent to Nelson Mandela Bay will support future investment and investment interest in the Eastern Cape’s green manufacturing economy,” Vilakazi said.

“The new SEZ Act has introduced significant tax benefits, a reduction of red tape and labour productivity-enhancing mechanisms to investors, which will make the Coega IDZ attractive as a location for investment.This further supported by Nelson Mandela Bay’s long-standing position as an industrial and manufacturing economic hub and, the availability of deep-water sea port, and a commitment towards green energy research by our local university. 

“The sum of these parts provide a unique arrangement of value propositions which is driving the attraction for foreign and local investment in the Coega IDZ,” concluded Dr. Vilakazi.