A memorandum of understanding was signed on Monday at Wittekleibosch in the Eastern Cape between partners hoping to develop the Tsitsikamma Community Wind Farm (TCWF) project.

The project would aim to generate about 40 MW of wind power by 2013, and would be worth about R1-billion.

The TCWF consortium consists of a number of key partners - the Tsitsikamma Development Trust, which operates on behalf of the community that owns the land, South African energy company Watt Energy and mining company Exxaro, which together hold a 46% stake.

The balance is jointly held by the Danish Industrialisation Fund for Developing countries and Danish independent power producer European Energy.

Other key partners in the project include: the Eastern Cape Community Wind Energy Development Association (ECCWEDA); the Danish wind turbine manufacturer Vestas; the Danish Export Credit Fund, which would provide debt credits; the Danish energy utility Dong Energy, which would procure carbon credits from the project; and Danish wind laboratory Riso, which was responsible for wind measuring and mapping.

A feasibility study, including the environmental-impact assessment, National Energy Regulator of South Africa licensing applications, and an Eskom grid connection application were currently under way, following the completion of the prefeasibility study, which was undertaken by an independent consultant.

The community has been in discussions with Eskom regarding the construction of a 2 x 80MW substation on the wind farm site, with a 132-kV transmission line to accommodate the project. This connection to the grid was expected to cost no less than R100-million, explained Watt Energy CEO and ECCWED chairperson Mcebisi Msizi.

Riso, together with the Council for Scientific and Industrial Research, would erect a wind measurement mast on the proposed site in January, and two other masts would be erected by Vestas in March. The masts would be at varying heights to ensure adequate wind modelling for the optimum wind yield for the project.

The consortium would still need to establish a power purchase agreement with the single buyers office under the renewable energy feed in tariff programme, and there was, as yet, no guarantee that the power would be sold on to Eskom at this stage.

It was estimated that there were some 5 000 MW of wind power under development in South Africa, while the government had mandated the procurement of 400 MW of wind power by 2013. The wind energy projects under development would, therefore, need to compete for the offtake of their power. These decisions would likely be based on affordability, especially regarding grid connection, as well as the broad-based black economic-empowerment shareholding of a project.

The TCWF project was said to be at a fairly advanced stage, compared with other wind projects under development in the country.

"The Wittekleibosch farm is currently undergoing extensive wind mapping to confirm the feasibility of the project. Thus far, the outcome has been extremely positive," said Msizi.

Ambassador of Denmark to South Africa Dan Frederiksen said that there was a strong group of Danish companies willing to enter into this market in South Africa, and which were assisting in establishing a framework to create understanding among authorities, investors, and governments about what was required to create a sustainable renewable energy project in South Africa.