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Project development company NuPlanet MD Anton-Louis Olivier says that the R77-million Bethlehem hydroelectric project, situated in the Free State, will be commissioned in November this year.
The company established for the purpose, Bethlehem Hydro, will develop, own and operate the 7-MW hydropower plant, and has contracted NuPlanet to manage the development and implementation of the project on its behalf.
As a renewable energy power producer, Bethlehem Hydro will cut back the emission of 33 000 t of carbon dioxide (CO2) a year by displacing coal-fired electricity. NuPlanet has also been contracted to manage the structure and sale of the company's greenhouse gas emission credits.
Olivier states that an opportunity to develop the hydropower project on the outflow of the Lesotho water scheme at Bethlehem was identified in 1999, after which the project received financing from the Dutch government.
"While development started in 2001, the project was brought to a financial close in August 2005, and in December 2006, construction started at the two sites," he says.
The two sites comprise a 3-MW power station at the Sol Plaatje Dam, and a remaining 4-MW station on a private farmland between Bethlehem and Clarens.
The construction team consists of project manager NuPlanet, consulting engineers Ninham Shand, mechanical engineers BWG Hydro, electrical engineers Merz & McClellan, civil contractor Eigenbau, and mechanical & electrical supplier Boving Fouress.
Bethlehem Hydro has secured the full financing required for the project's development and construction, while term loan debt is provided by the Development Bank of Southern Africa. The equity investors include NuPlanet, as well as HydroWSA, a broad-based black economic-empowerment consortium.
Upon completion, the project will operate two renewable energy power stations, using water from the As river in Bethlehem, while each power station will generate and sell 28 GWh a year to the Dihlabeng Local Municipality. Oliver adds that carbon credits from the project will be sold to a European buyer.
The project's annual income from CO2 emission reductions is estimated to be R1,8-million, while its power purchase tariff will average R0,22 a kilowatt hour.
NuPlanet has provided project management on many carbon-credit projects, and managed the first local verified project to produce carbon credits, which involved the conversion of coal to gas at one of brick manufacturer Corobrik's manufacturing plants.
The company is also in discussions with State-owned power utility Eskom, to sell hydropower through its Medium Term Power Purchase Programme (MTPPP).
In May this year, the utility issued proposals to the private sector to supply up to 3 000 MW of near-term electricity supply relief under the MTPPP.
Olivier states that NuPlanet has also secured rights on 10 MW of hydropower in the same river system as the Bethlehem project, which will comprise the building of power stations on three different sites.
"NuPlanet has started on technical feasibility study on one of the sites, while the environmental impact assessment has been completed on one of the other sites," he says.
He adds that full development of this new project should take place within a year, while construction will take at least another 18 months.
"NuPlanet is constantly looking for other hydropower opportunities in South Africa, but because it is a very arid country, there are not always such opportunities," he says.
He states that most opportunities for hydropower projects rely on water transfer schemes, where water is transferred from one site to another. The development of such projects are sometimes problematic, owing to issues of ownership rights that are difficult to overcome.
However, the company continues to explore possibilities in Lesotho and Mozambique.
"Owing to the large capital expenditure of hydropower projects, it is a high risk venture. However, hydropower provides the opportunity for a good economy of scale, and small management companies can operate with ease on bigger projects," he notes.
He says that there is a niche market for small companies to take on projects producing between 2,5 MW and 15 MW, that need commercial development, and adds that there are ample opportunities for such projects in South Africa and neighbouring countries.
Based in the Netherlands, NuPlanet develops and manages wind energy and hydropower projects in the clean energy sector. While its Dutch branch focuses on wind energy projects in the Caribbean, its South African counterpart, which was established five years ago, focuses on hydropower projects in Southern Africa.