The Winds of Change are Blowing

Transcription

1 The Business Chamber Renewable Energy Task Team Initiative The Winds of Change are Blowing A provincial perspective on the proposed, planned and approved Energy developments in the Eastern Cape A Nelson Mandela Bay Business Chamber Renewable Energy Event Donald McGillivray Pr. Eng. Pr CPM Wednesday 26 September 2012

2 LTMS South Africa Emissions Intensity South Africa s emissions intensity (emissions per GPD) is high compared to most developed (OECD) countries and developing countries. SA s emissions per capita are higher than China and India, which are also coal-based energy economies, and higher than Brazil Source: Long Term Mitigation Scenarios Strategic Options for South Africa

3 South Africa The Current Situation Dirty Coal Fired Power Centralised Energy Production High Transmission Losses What is the true cost of Coal Addiction???

4 South Africa The Current Situation

5 South Africa The Current Situation

6 South Africa The Current Situation Excluded: Environmental degradation Damage of roads and transportation infrastructure & Many other external costs

7 South Africa The Current Situation Consumers cannot afford this cost! Source

8 South Africa Energy Resource South Africa has a good supply of coal Cheap dirty coal has formed the foundation for the economic growth of South Africa However we are now paying the escalating cost both internal and externally South Africa s future coal reserves are also finite and the value should be optimised: The BP Statistical Review of World Energy South Africa's coal reserve has been reduced by nearly 18 Gt, from 48 Gt in the previous annual review to 30 Gt in the 2008 edition - A question remains, however, about the completeness and rigour of the current reassessment. Rutledge 9 recently provided an estimate of only 23 Gt for the full recoverable cumulative coal resource in the African continent (effectively South Africa, Botswana and Zimbabwe), of which about 8 Gt was already consumed by production to end The implication that the present remaining reserve of African coal is only about 15 Gt deserves closer scrutiny. South Africa is richly endowed with abundant clean sustainable renewable energy resources both in the form of wind and solar energy

9 South Africa ESKOM New Build Programme => 66% Plant Capacity Factor

10 South Africa The Construction Cost of Coal in SA - Medupi Source Engineering News Medupi plant capacity = MW Price uncertainty Full construction cost estimate = R130 bn going into the Cost per MW = R27m/MW future with high Plant capacity factor = 85% escalation!! Marginal Cost per kwh = R External cost = R1.38/kWh-R2.29/kWh Escalation = >> CPI (O&M) high escalation, increasing fuel cost Wind DoE Rnd 2 Cost per MW = 15-18m / MW Plant capacity factor = 35% Cost per kwh = R0.89 Escalation = CPI (5.5%) Price certainty going into the future with low escalation

11 South Africa Is there an alternative to Coal Fired Power Marginal cost of Coal-fired Power Now Wind grid parity Soon Solar PV grid parity Solar PV Energy Wind Energy

12 South Africa s vast Renewable Energy Resource South Africa is richly endowed with abundant clean sustainable renewable energy resources both in the form of wind and solar energy Excellent wind resource 7m/s -> 9m/s Excellent Solar PV resource

13 DoE REIPPPP Source

14 DoE REIPPPP The procurement documents were released on the 03 of August 2011 and compulsory bidders conference for the first and second window on the 14 of September The document provides for procurement of 3725MW in five different rounds subject to the availability of the MW The Department. Under round one: Received 53 Bids on the 4 th of November Announced 28 preferred bidders in December 2011 With regards to round two: Received 79 bids on the 5 th of March 2012 These bids amount to 3255MW whilst the cap was 1275MW

15 DoE REIPPPP Requirements Rules RFP Part A RFP Part B Qualification Environment Land Economic Develop Finance Technical Price Capacity Price Job creation Local content Preferential Procurement Enterprise Development Socio-economic development RFP Part C Comparative Evaluation

16 DoE REIPPPP Evaluation composition Evaluation team: International reviewers Legal review Linklaters (UK) Technical review Blueprint consult Financial review cross-moderation between the two Financial Advisory firms Governance review Ernst & Young Legal evaluation team Bowman Gilfillan Edward Nathan Sonneberg Ledwaba Mazwai Webber Wentzel BKS Technical evaluation team Matt Macdonald Financial evaluation team Ernst & Young PWC Evaluation Streams: Legal Environment Environmental Authorization Legal Land Land right Notarial lease registration Proof of land use application Legal Commercial Acceptance of the PPA Project structure Economic Development Contributor status level 5 Compliance with threshold Financial Full and partial price indexation Technical Eligibility Energy resource

17 DoE REIPPPP List of Round 1 Preferred Bidders Project ID Project Bidder Name Technology Net Capacity Location Province IPPID138 MetroWind Van Stadens Wind Farm MetroWind (Pty) Ltd Onshore Wind Port Elizabeth Eastern Cape Eastern Cape IPPID148 Red Cap Kouga Wind Farm - Oyster BaRed Cap Kouga Wind Farm (Pty) Ltd Onshore Wind 77.6 Port Elizabeth, Eastern Cape Eastern Cape IPPID043 Dorper Wind Farm Dorper Wind Farm (Pty) Ltd Onshore Wind 97 Stormberg, Eastern Cape Eastern Cape IPPID186 Jeffreys Bay South Africa Mainstream Renewable Power Jeffreys Bay pty LimOnshore Wind Jeffereys Bay, Eastern Cape Eastern Cape IPPID225 Cookhouse Wind Farm African Clean Energy Developments Onshore Wind 135 Cookhouse, Eastern Cape Eastern Cape IPPID031 Letsatsi Power Company Consortium consisting of Kensani Capital Investments (Pty) Ltd, SolarReSolar Photovoltaic 64.0 Bloemfontein, Free State Free State IPPID052 Soutpan Solar Park Erika Energy (Pty) Ltd Solar Photovoltaic 28.0 Waterberg, Limpopo Limpopo IPPID035 Witkop Solar Park Core Energy (Pty) Ltd Solar Photovoltaic 30.0 Waterberg, Limpopo Limpopo IPPID036 Noblesfontein Coria (PKF) Investments 28 (Proprietary) Limited Onshore Wind 72.8 Noblesfontein, Northern Cape Northern Cape IPPID798 Khi Solar One Khi Solar One Consortium Solar CSP 50.0 Upington, Northern Cape Northern Cape IPPID118 KaXu Solar One KaXu Solar One Consortium Solar CSP 100 Pofadder, Northern Cape Northern Cape IPPID064 Mulilo Renewable Energy Solar PV De Aar Gestamp Mulilo Consortium Solar Photovoltaic 9.7 De Aar, Northern Cape Northern Cape IPPID128 Konkoonsies Solar Limarco 77 (Pty) Ltd Solar Photovoltaic 9.7 Pofadder, Northern Cape Northern Cape IPPID163 Aries Solar Sevenstones 159 (Pty.) Ltd. Solar Photovoltaic 9.7 Kenhardt, Northern Cape Northern Cape IPPID443 Greefspan PV Power Plant AE-AMD Independent Power Producer 1 (Pty) Ltd Solar Photovoltaic 10.0 Douglas, Northern Cape Northern Cape IPPID696 Herbert PV Power Plant AE-AMD Independent Power Producer 1 (Pty) Ltd Solar Photovoltaic 19.9 Douglas, Northern Cape Northern Cape IPPID065 Mulilo Renewable Energy Solar PV Prieska Gestamp Mulilo Consortium Solar Photovoltaic 19.9 Prieska, Northern Cape Northern Cape IPPID182 De Aar Solar PV South Africa Mainstream Renewable Power De Aar PV (Pty) Ltd Solar Photovoltaic 48.3 Pixley Ka seme, Northern Cape Northern Cape IPPID572 South Africa Mainstream Renewable Powe South Africa Mainstream Renewable Power Droogfontein (Proprietary) Solar Photovoltaic 48.3 Kimberley, Northern Cape Northern Cape IPPID032 Lesedi Power Company Consortium consisting of SolarReserve South Africa (Pty) Ltd, Kensani C Solar Photovoltaic 64.0 Postmasburg, Northern Cape Northern Cape IPPID444 Kathu Solar Energy Facility Lokian Trading & Investments (Pty) Limited Solar Photovoltaic 75.0 Kathu, Northern Cape Northern Cape IPPID564 Solar Capital De Aar (Pty) Ltd Solar Capital De Aar (Pty) Ltd Solar Photovoltaic 75.0 De Aar, Northern Cape Northern Cape IPPID155 RustMo1 Solar Farm RustMo1 Solar Farm Solar Photovoltaic 6.8 Rustenburg, North-West Province North-West Provin IPPID159 Kalkbult Scatec Solar Solar Photovoltaic 72.5 North-West Province North-West Provin IPPID123 Dassiesklip Wind Energy Facility Klipheuwel - Dassiefontein Wind Energy Facility (Proprietary) Limited Onshore Wind 26.2 Caledon, Western Cape Western Cape IPPID202 Hopefield Wind Farm Umoya Energy (Pty) Ltd Onshore Wind 65.4 Hopefield, Western Cape Western Cape IPPID164 SlimSun Swartland Solar Park SlimSun Solar Photovoltaic 5.0 Swartland, Western Cape Western Cape IPPID037 Touwsrivier Project CPV Power Plant No. 1 Solar Photovoltaic 36.0 Touwsrivier, Western Cape Western Cape

18 DoE REIPPPP Map of Round 1 Preferred Solar PV Bidders

19 DoE REIPPPP Map of Round 2 Preferred Bidders

20 DoE REIPPPP Summary of Round 2 Preferred Bidders No of Bids MW taken by Preferred Bidders Maximum MW allocated for round 2 Solar photovoltaic Wind Small Hydro CSP TOTAL

21 DoE REIPPPP Summary of Round 2 Preferred Solar Bidders IPPID Project Name MW 168 Solar Capital De Aar Sishen Solar Facility Aurora Vredendal Linde Dreunberg Jasper Power Company Boshoff Solar Park Upington Solar PV 8.9 TOTAL 417.1

22 DoE REIPPPP Summary of Preferred Solar Bidders Round 1 and Round 2 Comparison Bid Window 2 Bid Window 1 Price: Fully Indexed (Ave Rand per MWh) R R MW allocation 417 MW 632 MW Total Project Cost (R million) R R Local Content Value (R million) R5 727 R6 261 Local Content % 47.5% 28.5% Job Creation : Construction (People) Job Creation : Operations (People)

23 DoE REIPPPP Summary of Round 2 Preferred Wind Bidders IPPID Project Name MW 014 Gouda Wind Facility Amakhala Emoyeni (Phase 1) Eastern Cape Tsitsikamma Community Wind Farm West Coast Waainek Grassridge Chaba 20.6 TOTAL 562.5

24 DoE REIPPPP Summary of Preferred Wind Bidders Round 1 and Round 2 Comparison Bid Window 2 Bid Window 1 Price: Fully Indexed (Ave Rand per MWh) R 897 R MW allocation 563 MW 634 MW Total Project Cost (R million) R R Local Content Value (R million) R R Local Content % 36.7% 21.7% Job Creation : Construction (People) Job Creation : Operations (People)

25 DoE REIPPPP Summary of Preferred CSP Bidders Round 1 and Round 2 Comparison Bid Window 2 Bid Window 1 Price: Fully Indexed (Ave Rand per MWh) R R MW allocation 50 MW 150 MW Total Project Cost (R million) R R Local Content Value (R million) R R Local Content % 36.5% 21.0% Job Creation : Construction (People) Job Creation : Operations (People) 50 70

26 DoE REIPPPP Summary of Jobs Round 2 Preferred Bidders Jobs per Province Description Jobs during construction period Jobs during operations period BW2 BW2 Eastern Cape Province Free State Province Limpopo Province 0 0 Northern Cape Province North-West Province 0 0 Western Cape Province TOTAL

27 DoE REIPPPP Summary of Round 2 Investment per Province Description Total Project Cost Local content value (ZAR million) (ZAR million) Northern Cape Eastern Cape Western Cape Free State TOTAL

28 DoE REIPPPP Analysis of MW invested and remaining Technology MW allocation in accordance with the Determination MW capacity allocated in the First Bid Submission Phase MW capacity allocated in the Second Bid Submission Phase MW capacity for allocation in future Bid Submission Phases Onshore wind MW MW MW MW Solar photovoltaic MW MW MW MW Concentrated power solar MW MW 50.0 MW 0.0 MW Small hydro ( 10MW) 75.0 MW 0.0 MW 14.3 MW 60.7 MW Landfill gas 25.0 MW 0.0 MW 0.0 MW 25.0 MW Biomass 12.5 MW 0.0 MW 0.0 MW 12.5 MW Biogas 12.5 MW 0.0 MW 0.0 MW 12.5 MW Total MW MW MW MW

29 DOE REIPPPP Round 2 Wind Fully Partially Fully Partially Part C Part C Indexed Indexed Indexed Indexed Portion Financial Part C Total IPP Project Name Province MW EAT EAT Price Price Indexed Score ED Score Score Gouda Wind 014 Western Cape % Facility 362 Waainek Eastern Cape % Chaba Eastern Cape % Amakhala Emoyeni (Phase 1) Eastern Cape Tsitsikamma Community Wind Farm = Eastern Cape Province Eastern Cape % Eastern Cape % Grassridge Eastern Cape % West Coast 1 Western Cape %

30 DOE REIPPPP Round 2 Solar PV IPP Project Name Province MW Fully Indexed EAT Partially Indexed EAT Fully Indexed Price Partially Indexed Price Portion Indexed Part C Financial Score Part C - ED Score Part C Total Score 375 Vredendal Solar Park 373 Western Cape % Aurora Solar Park Western Cape % Upington Solar PV Solar Capital Aggenys Sishen Solar Facility 750 Boshoff Solar Park Northern Cape % Northern Cape % Northern Cape % Free State % Jasper Power Northern Cape % Company 523 Linde Northern Cape % Dreunberg Eastern Cape %

31 DOE REIPPPP Round 2 Hydro & CSP IPP Project Name Stortemelk Hydro (Pty) Ltd Neusberg Hydro Electric Project A Province MW Fully Indexed EAT Partially Indexed EAT Fully Indexe d Price Partiall y Indexed Price Portion Indexed Part C Financial Score Part C ED Score Part C Total Score Free State % Northern Cape % IPP 002 Project Name Bokpoort CSP Project Province Northern Cape MW Fully Indexed EAT Partiall y Indexed EAT Fully Indexe d Price Partially Indexed Price Portion Indexed Part C Financial Score Part C ED Score Part C Total Score %

32 DoE Round 1 Mainstream Jeffreys Bay Wind Farm

33 The Future The Sustainable High Road clean, renewable wind energy project good for South Africa good for the Nelson Mandela Bay Municipality (NMBM) & the Eastern Cape Province very good for the local community Wind energy is the lowest cost, utility scale, commercially viable, clean sustainable renewable energy generation option available to South Africa

34 Coega Wind Turbine a first for South Africa: Commissioned May 2010 WTG Components : Vestas V90-1,8MW (95m) 4 x 4,2mø Tower Sections (each approx 24,4m long) Rotor Hub 18 ton Nacelle (Generator) 70 ton 3 x 44m long Rotor Blades (each 8 ton)

35 The Nelson Mandela Bay van Stadens wind farm The Future The Sustainable High Road Van Stadens Source Nelson Mandela Bay Wind Resource Map: Van Stadens Wind farm site best in class wind resource site with wind generating clean electricity 85% of the time

36 Metrowind Grid Connection The wind farm: invests in aging municipal infrastructure, strengthens and reinforces the Municipal Grid, reduces grid losses, improves the quality of supply and improves the sustainability of supply Eskom Point of Supply of electricity to NMBM in NE Metrowind Van Stadens Wind Farm area of supply Van Stadens at SW extremity of Metro Grid Source

37 Metrowind van Stadens Wind Farm The Metrowind Van Stadens Wind Farm Is the most advanced DOE REIPPP Project and will be the first commercially operational independent power producer green energy wind farm in South Africa producing clean electricity into the municipal grid under the DOE programme. Go The Metrowind Van Stadens Wind Farm World class wind farm site Lies outside of all Environmental and other No Go areas, Conservation Biodiversity Areas, Primary Radar & Lies on transformed Agricultural grazing land in NMBM Rural Zone

38 Metrowind - The Benefits

39 Metrowind - The Benefits

40 Metrowind - Socio Economic Development & Local Economic Development Van Stadens Nature Reserve Woodridge Eco School Van Stadens Witteklip Fitches Corner Shamrock St Albans Prison The Metrowind van Stadens Wind Farm hasl invested in Socio Economic Development of the surrounding marginalised rural communities Waste Recycling Blue Horizon Bay

41 Metrowind Socio Economic Benefits

42 Metrowind Environmental Benefits

43 Metrowind Environmental Concerns Addressed

44 Metrowind Construction Programme

45 Metrowind van Stadens wind farm is

46 Metrowind Economic Development Obligations EDC ELEMENT OBLIGATIONS Onshore Wind No. Group Description Measurement Threshold Target Bidder's Response 1. Job creation 100-SR-01 RSA-Based Employees Number of Citizens employed *100 / Number of RSA who are Citizens Based Employees 50.00% 80.00% 72.37% 100-SR-02 RSA-Based Employees Number of Black Citizens employed *100 / Number who are Black Citizens of RSA Based Employees 30.00% 50.00% 60.29% 100-SR-03 Skilled Employees who Number of Skilled Black Citizens employed *100 / are Skilled Black Citizens Skilled Employees 18.00% 30.00% 47.49% 100-SR-04 RSA-Based Employees that are Citizens from Local Communities Number of Citizens from Local Communities employed *100 / Number of RSA Based Employees 12.00% 20.00% 53.41% 2. Local Content 200-SR-01 Value of Local Content Value of Local Content Spend / Total Project Value Spend 35.00% 60.00% 46.99% 3. Ownership 300-PC-01 Shareholding by Black People in the Project Company Shareholding by Black people / Total Shareholding 12.00% 30.00% 34.78% 300-CC-01 Shareholding by Black People in the Contractor responsible 8.00% 20.00% 25.00% for Construction 300-OM-01 Shareholding by Black People in the Operations Contractor 8.00% 20.00% 8.18% PC-02 Shareholding by Local Communities in the Project Company Shareholding by Local Communities / Total Shareholding 2.50% 5.00% 5.00%

47 Metrowind Economic Development Obligations p y 4. Management control 400-SR-01 Black Top Management Number of Black People in Top Management using the Adjusted Recognition of Gender *100 / Number of People in Top Management 5. Preferential Procurement 6. Enterprise Development 7. Socio-Economic Development EDC ELEMENT OBLIGATIONS 500-SR-01 BBBEE Procurement Spend Amount of Procurement Spend on BBBEE Contributors recognised in terms of BBBEE Recognition Levels * 100 / Total amount of Procurement Spend 500-SR-02 QSEs and EMEs Amount of Procurement Spend on QSEs and EMEs * Procurement 100 / Total amount of Procurement Spend 500-SR-03 Women Owned Vendors Procurement 600-SR-01 Enterprise Development Contributions 600-SR-02 Adjusted Enterprise Development Contributions 700-SR-01 Socio-Economic Development Contributions 700-SR-02 Adjusted Socio-Economic Development Contributions Amount of Procurement Spend on Women Owned Vendors * 100 / Total amount of Procurement Spend Enterprise Development Contributions * 100 / Revenue Adjusted Enterprise Development Contributions * 100 / Revenue Socio-Economic Development Contributions * 100 / Revenue Adjusted Socio-Economic Development Contributions * 100 / Revenue Onshore Wind 40.00% 22.03% 60.00% 81.20% 10.00% 0.00% 5.00% 0.00% 0.60% 0.50% 0.60% 0.68% 1.00% 1.50% 1.00% 1.00% 1.50% 1.35%

48 Metrowind: 67 minutes for Nelson Mandela Day 18 July 2012 A sustainable Community Upliftment project everyone wins

49 Metrowind: Turbine foundation embedment ring being shipped to SA The foundation ring components were offloaded at the Port of Ngqura on Friday 21 September 2012 the first wind turbine components to arrive in SA under the DoE REIPPP Programme another first for Nelson Mandela Bay!

50 The Future The Sustainable High Road Greenpeace the advanced Energy [r]evolution A sustainable energy outlook for South Africa Report 2 nd edition 2011 South Africa energy scenario Source Our children s future is in our hands