Project achieves financial, commercial close

Independent power producer EDF Renewables achieved commercial and financial close on its Umoyilanga project on November 28, 2023, reaching commercial close with the Department of Mineral Resources and Energy (DMRE), and then concluding financial close with financial institutions Nedbank, Rand Merchant Bank and the Development Bank of Southern Africa.

This was consequent to its attaining legal close on August 30, 2023, with the signing of the power purchase agreement (PPA) with State-owned power utility Eskom, and the implementation agreement with the DMRE, for the hybrid renewable-power facility to be built in South Africa.

Legal close followed in the wake of the consortium of EDF Renewables, and privately held investment company Perpetua Holdings, winning the Umoyilanga project bid in the South African government’s Risk Mitigation Independent Power Producer Procurement Programme, in March 2021.

Early works have started, and the construction period under the PPA is expected to start immediately after attaining financial close, with commercial operation expected in May 2025.

The bespoke project combines solar, wind and battery storage technologies to offer dispatchable and reliable power to the national electrical grid.

The project will operate as a virtual power plant, combining generation from two sites which are 900 km apart – namely Avondale in the Northern Cape, with 115 MW of solar photovoltaic (PV) and 30 MW of battery storage, and Dassiesridge in the Eastern Cape, with 63 MW of wind and 45 MW of battery storage.

The unique combination of wind and solar resources with batteries, enables Umoyilanga to provide 75 MW on demand from 05:00 to 21:30 as per the requirements of the PPA, and demonstrates that renewable energy can provide reliable, dispatchable power at a competitive price.

To achieve this, batteries at Dassiesridge will generally charge from the wind energy at night, discharging power in the morning until the sun rises. The solar installation at Avondale will supply the bulk of the energy during the day, supplemented by wind energy from Dassiesridge.

Excess solar energy will be used to charge the batteries at Avondale, which will discharge after sunset.

An energy management system will give instructions to assets across both sites to optimise the power supply in real time, depending on weather forecasts and Eskom’s requirements.

The low-carbon electricity produced will help to meet the electricity needs of 120 000 households for 20 years, based on the Eskom residential consumption average of 3 319 kWh a household.

Working as a Collective

To deliver the Umoyilanga project, EDF Renewables has signed contracts with major contractors for each technology including a turnkey engineering, procurement and construction agreement with energy company China Energy Engineering Corporation, which will proceed with the final design, procurement and construction of the 115 MW Avondale PV plant.

Further, it signed a turbine supply and installation agreement with sustainable energy solutions provider Vestas, to proceed with the erection of 14 wind turbines of 4.5 MW each on Dassiesridge.

The balance of plant contract, to build all required infrastructure on Dassiesridge has been appointed to civil engineering firm Power Construction and electrical engineers Adenco Construction.

Finally, the battery energy storage system supply agreement with energy solutions provider Sungrow Power Supply, will ensure delivery of battery systems to both sites.

The project has committed to providing around 890 job year opportunities for South African citizens – measured in job years – during the construction period across Dassiesridge and Avondale.

Further, the project has committed to contributing more than 40% of the capital expenditure to local content, including procurement of South African goods and services.

Over the 20-year operational period, 1% of revenue will be dedicated to local communities through socioeconomic initiatives.

“The commercial and financial close of the project is a crucial milestone before the launch of the construction phase, so today is the achievement of a long journey,” said EDF Renewables CEO Tristan de Drouas.

Further, he noted that the company is looking forward to implementing this project, and in doing so, supporting the South African government’s and EDF Renewables’ ambitions to develop low-carbon energy solutions for the future, which will also help to solve the loadshedding crisis.

“We have forged a solid collaboration and true sense of partnership with EDF Renewables [. . .] and we are collectively confident it will deliver [value] to South Africa,” Perpetua Holdings director Logan Govender concluded.