The Department of Energy (DoE) on Thursday started discussions on the Northern Cape Solar Park concept, which it said would proceed during November, after which the government would adopt a strategic plan, and then start building the park.
It planned to start negotiating power purchase agreements with independent solar power producers, which satisfied the agreed conditions, in early 2011.
Energy Minister Dipuo Peters said that the conference, which was held in Upington over two days, would establish a deeper understanding of the vision, aspirations and commitment of South Africa, in its quest for energy security through a diversity of energy sources.
She said that the conference was also a platform to confirm the ability of solar power as a base load option. It was an opportunity for government to test the solar park initiative with private investors, and to enable the "fine tuning" of the strategy, based on responses from the market.
The creation of a Solar Park would serve as a concentrated zone of solar development in South Africa, and would include significant solar generation capacity by different independent power producers. Up to 5 000 MW of solar power over ten years, was the ambition.
Peters said that a full feasibility study into the creation of a Solar Park was currently under way, in collaboration with other key government departments, Eskom, the Development Bank of Southern Africa and the Central Energy Fund (CEF).
This followed a pre feasibility study, which was conducted by the Clinton Climate initiative, and yielded positive results.
DoE director-general Nelisiwe Magubane also noted that Eskom was playing a significant role in the project, by providing technical assistance, such as analysis on grid capacity and transmission analysis, alongside the integration of the initiative into the current and future transmission plans to ensure that proper planning was done as required.
The Solar Park concept was considered particularly attractive because of the economies of scale that could be leveraged, and the integration of processes. Instead of conducting many environmental impact assessments and inter-connectors, only a few will be required.
"This will save time and money," stressed Peters.
The processes for authorisations would also be streamlined, enabling quicker turnaround times through efficiency by having a dedicated site for the development of the Solar Park prepared in advance.
The DoE also anticipated that the costs to project developers, particularly those associated with pre-investment may be reduced, because government would provide infrastructure such as water, power and transport solutions.
However, it has been highlighted previously that private investors would not receive the higher renewable energy feed-in-tariff for power produced from the solar park.
Currently, the government's position on the technology choice within the park was neutral. "Whatever cost and technology efficiencies are proven - concentrated solar power and photovoltaic - will work for us. This will assist with the monitoring and evaluation of technology performance to guide the deployment of the best performing technologies for other solar parks," noted Peters.
The solar park would be deployed in phases, the first phase seeking to commission some 1 000 MW of solar power. This, said Peters, could be segmented into developers and technologies building 20 MW, 50 MW, 100 MW, or 250 MW at a time.
This first phase would collate data through testing and demonstration, which revealed cost, efficiency and localisation possibilities, to inform planning in the further roll-out of the park.
Peters highlighted that the DoE was also considering the possibility of projects that qualified for "National Demonstration Project" (NDP) status, in the context of the feasibility study.
"These are promising solar projects where the majority shareholding is held by government, and the risk profile in the short term is slightly higher than what is commercially possible. Under these conditions, government is able to assist in overcoming the risk barriers in order to demonstrate technical and financial sustainability under local conditions," said Peters.
Of particular interest would be projects, which demonstrate the capacity for local component manufacture, and those with the potential to improve storage and validate the capacity of solar as baseload power.
The legal team within the DoE was currently developing terms of reference for Solar NDP and after consultations with CEF, the National Treasury and other partners, expressions of interest would be sought in this regard.
"We are looking for partnerships with those who are committed to help South Africa implement its new growth path," added Peters.
The country's so-called ‘new growth path' was aimed at addressing unemployment and poverty through creating jobs, and the removal of bottlenecks in energy infrastructure provision has been identified as one of the challenges to be overcome.
The green economy, which included renewable energy, has been highlighted as a new growth path project which could create some 300 000 jobs by 2020, with about 80 000 of those in manufacture.
The Industrial Development Corporation has been tasked with raising the necessary capital to drive the growth of the green industrial economy.