ACWA Power, one of the world’s leading investor, developer, co-owner and operator of a portfolio of power and desalinated water plants, has developed into a leader of solar energy. Based in Saudi Arabia, the firm’s portfolio of renewable energy projects expands across the globe and can be found in Europe, Africa and Asia. The firm’s most recent and award-winning South African venture is the Bokpoort CSP Independent Power Project (IPP) located in the rural town of Groblershoop in the Northern Cape, 900 kilometers west of Johannesburg.
The project was developed as part of the country’s renewable IPP programme set up by the Department of Energy. Construction began in June 2013, Bokpoort connected to the grid in November 2015 and the project began official commercial production in March of this year. Bokpoort’s CEO, Nandu Bhula explained the reason for building the project in the Northern Cape was because of its optimal high radiation data. “The whole of the Northern Cape is ideal for solar,” says Bhula. “South Africa has a large abundant resource of solar energy, probably second or third best in the world.” The plant is making use of the only dependable renewable technology available to the country today that can cover South Africa’s daily evening peak demands from 5pm to 9pm.
Capable of providing more than nine hours of thermal energy, Bokpoort operates like a giant rechargeable battery. “This essentially means you can run 17-18 hours a day at full load, non-stop, which pretty much covers the whole demand period in terms of the South African grid.” The plant is expected to generate 220,000 megawatt-hours of power per year to over 200,000 typical South African homes throughout both day and night.
After only a few months of operation it has already set a new African record by generating electricity for a constant period of 161 hours, equivalent to almost seven days within the first month of operation. “In total we ran 310 of 352 hours in the first two weeks of Commercial Operation, stopping only once and that is quite a long period of time to be running with a CSP as a reliable continuous operator,” explains Bhula. “That in itself is going to turn heads because not many people expect CSP plants to be as reliable and effective in supporting the grid over extended periods.”
CEO Bhula’s in-depth knowledge and background in the energy sector has made him the perfect fit to lead the project. With an extensive 18 years of experience in the energy industry, Bhula said he made the decision to join ACWA Power in 2014 based on their aggressive ambitions and exciting projects. The firm is interested in making southern Africa one of the key regional pretenses outside of the Middle East and the CEO explains that vision is what made him want to work on the project.
With a strong background in the development and running of power stations, the dedicated leader says he wants to be part of ACWA Power’s investments in the Southern African region further, “The plan is to become a strong competitor in the regional energy industry for ACWA Power and to become one of its stronghold points on a global basis.”
Situated in the remote part of the Northern Cape, the rural area has presented many challenges for Bokpoort. According to Bhula, the biggest challenge has been acquiring localised skills. “The Northern Cape has the lowest population densities in the country and probably the lowest GDP and thus development in terms of all provinces,” he says. ACWA Power began helping locals develop skills by partnering with local training institutes to ensure staff had the basic skills to be employed during construction. In addition, the company started sponsoring schools to develop a pipeline of skills. “We have successfully managed the initial challenge. We have overcome it strategically from our side and focused on community development and sustainability,” the CEO explains.
In addition to generating much needed power for the area, the development of Bokpoort has allowed ACWA Power to help support and give back to the local community in various ways. Many people don’t have access to certain facilities. The company donated 305 PV rooftop installations including batteries and provided televisions and radios for each household. “We wanted them to be connected to the world and to keep up to date with the times,” says Bhula. “It has completely been changed the lives of these 305 homes.” In addition, Bokpoort saw to it that 77 other homes received potable water for the first time. The firm’s generous contributions also helped children in the area by delivering each child a pair of shoes and providing transport to and from school. “We gave all the students bicycles,” explains Bhula. “It was a small gift, but actually it makes a huge difference in terms of their schooling experience.”
ACWA Power has contributed immensely to the local community with an estimated US150 million spent on local content, services, and production in the province and country. Bhula says the firm has developed quite a good relationship with the community, local stakeholders, municipalities and the Mayor. “They are very excited to have us in the community, which is not the case for all new construction projects in rural areas.” In 2015, ACWA Power won the African Community Project of the Year award at the African Utility Conference last year.
Engineering, Procurement and Construction (EPC) Consortium
Bokpoort CSP was constructed by a contracted EPC consortium of partners including Spanish companies TSK, Acciona, and SENER, as well as South African partner, Crowie Concessions. Acciona, SENER and TSK, have brought a lot of CSP experience to the project. Bhula explained the reason the firm chose Spanish companies was because they are well experience in CSP technology with a strong track record in similar plants around the world. “The three Spanish companies all bring in different expertise,” says Bhula. “Between the three, they make a very good match and truly built a successful high quality power station.”
ACWA Power has a flat rate agreement for 20 years with ESKOM, South Africa’s electricity utility. The firm also has dedicated production targets for yearly performance. ACWA Power is the project’s major shareholder but only holds 40 per cent, while the remaining 60 per cent is held by South Africa shareholders with the largest being the Public Investment Corporation and Lereko Metier. “ACWA Power’s aim, through projects like Bokpoort and future projects in the pipeline, is to set new standards in pricing thereby support local social development and economic growth.” says Bhula.
In addition to Bokpoort, ACWA Power is expecting to commence construction on a second investment, its 100MW Redstone CSP project also in the Northern Cape. The project will offer 12 hours of storage capacity and is currently expecting to achieve financial closure in the next quarter. Bhula hopes to start Redstone construction soon thereafter. “The beauty of CSP is that you can get it on the bars in two and a half years.”
The ambitious company also has a bid for a 300MW coal-fired power station in South Africa and an additional 150MW tower in the Northern Cape. Although starting with CSP projects, the dynamic company is not only focused on one type of technology, it’s currently looking at diversifying in the country to cover coal and gas projects as well.
In Bhula’s opinion, Bokpoort CSP will be a pioneer in the renewable energy industry in South Africa stating it to be one of the projects that has created the greatest mine-shift in CSP technology. “I think there’s huge potential for CSP technology in the Northern Cape to become a major economic game changer.”
“South Africa, with this strong IPP programme, sturdy government backing and clarity and certainty to all developers and this wonderful solar resource, is an ideal ground for investors to come in and invest and build on CSP and PV technologies,” Bhula concludes.