Wind farm beats Kusile to grid

business.iafrica.com
21 May 2013

With South Africa's electricity woes becoming more pressing, power utility Eskom has won the National Energy Regulator's (Nersa's) approval to build a R2.4 billion wind farm in the Western Cape. Construction will start later this year, with the wind farm set to deliver up to 100MW of electricity by the end of next year-beating the R170 billion Kusile power station onto the grid.

Eskom said on Monday the project, situated at Koekenaap in the Vredendal area, would enter full commercial production by the end of next year. Increasing energy supply has become critical for the power utility. It warned last month that South Africa would face tight supply during winter. The wind farm is part of the Department of Energy's drive to add 3725MW of generating capacity from renewable sources, mainly wind and solar, by 2018.

Eskom CEO Brian Dames said the cost of the project compared favourably with the R1.14/kW that the government would pay independent power producers (IPPs) for their renewable energy in the first round. The cost of power dropped to 89.7¢/kW in the second round of the IPP, for which agreements were finalised two weeks ago.

In February, Nersa granted Eskom an 8%/year tariff increase for the next five years, taking the cost of electricity to 89.13¢/kW at the end of March 2018.

"This comes below the cost of IPPs and is good news for us", Eskom spokesperson Hilary Joffe said. The project has been funded by development finance institutions, including the World Bank, African Development Bank, Clean Technology Fund and Agence Francaise de Developpement. "That has lowered the cost of funding", Ms Joffe said.

Industrial company Siemens will build and install the wind turbine generators, and then hand them over to Eskom to run, Ms Joffe said. The first power will come onstream during the first half of next year.

That will be well ahead of the 4800MW Kusile coal-fired powered station that Eskom is building at an estimated cost of R170 billion in the Mpumalanga province. The company initially expected the station to start producing power next month, but that projection was pushed back to the end of next year.