The National Electricity Regulator of South Africa (NERSA) has approved two solar power projects under SA’s new regulations which allow for faster and simpler license approvals for the private power projects. These two solar plants of 100 MW each are being developed by the global renewable energy developer SOLA Group in the North West province.
The two solar PV projects are the first private projects to be approved by the NERSA since President Cyril Ramaphosa removed the need for seeking licenses by independent power producers for building plants that have a capacity of up to 100 MW.
Both the solar PV plants are under development at Ditsobotla Local Municipality in the North West province. The projects are being conceived, funded, built, and operated for the US-based titanium products supplier Tronox by the SOLA Group and its partners.
Earlier this year, SOLA Group entered into a power purchase agreement (PPA) with Tronox, which operates several mines and smelters in South Africa. The solar projects are expected to deliver 540 GWh of clean energy to five different mining facilities through the long-term PPA.
The majority-owned projects by the SOLA Group will cost around R3.2 billion (~$203 million) to construct and are expected to be fully operational by 2023. The financial close of the project is expected in mid-July of this year.
Referring to the project approval by NERSA, SOLA Group CEO Dom Wills, said, “The significance of this first move is that it will pave the way for many more large-scale private projects to receive approvals to be able to contribute to generation capacity to the grid. This is a clear signal to the market that private power is achievable and there are private funders that are excited to finance this market.”
In August last year, the Government of South Africa raised the threshold for the distributed-generation solar segment to 100 MW, exempting the power project developers from applying for generation licenses to improve the entire permitting process.
Under this new rule, a wheeling fee has to be paid by the IPPs to state-owned utility Eskom for the maintenance and upkeep of their project infrastructure for energy transport. The IPPs can produce energy in one Eskom-connected area and sell it to their clients in other Eskom-connected areas.