Upington solar park, South Africa

16th September 2011 By: Lisete Bigala

Name and Location
Upington solar park, Northern Cape, South Africa.

Project Description
The project proposes to build a mega solar park near Upington, at the edge of the Kalahari desert, where it is envisaged that a total 5 000 MW of renewable energy could be produced.

The project will possibly be developed in phases, with the initial stage envisaged to generate some 1 000 MW of power. This initial stage will be used to collate data through testing and demonstration, to reveal cost, efficiency and localisation possibilities, which will, in turn, be employed in the further roll-out of the park.

The large-scale park is planned to be one of the largest proposed solar farms in the world. If it reaches full capacity, it will be five times bigger than the 968 MW Blythe solar power plant, which is being built in southern California, in the US.

The cost of the project is estimated at R150-billion, over a ten-year horizon.

The park will be constructed over a ten-year period. First commercial deals relating to the project are scheduled for completion in the first half of 2011, with first electricity expected to flow into the grid by 2012.


Key Contracts and Suppliers
Clinton Climate Initiative (prefeasibility study); and Fluor Corporation (conceptual master plan).

Latest Developments
September 2011

The full feasibility study into the solar park could be completed by the end of 2012, and could stimulate the development of a larger solar corridor across Southern Africa. Sub-Saharan Africa is drenched in bright sunlight for an average of 325 days in a year, thus the South African government is, keen to more fully exploit this solar resource within its national borders, as well as within the region more generally.

The Department of Energy (DoE) is currently undertaking a process of procuring some 1 650 MW of solar capacity, as part of its independent power producer tender for the procurement of 3 725 MW of renewable energy capacity between 2012 and 2016.

The Integrated Resources Plan (IRP 2010), which is guiding the development of conventional and renewable power generation capacity for the 20-year period from 2010 through to 2030, is a living document and the next version could well include a higher proportion of solar, including possible solar imports.

The costs of deploying solar capacity is still high, but South Africa hopes to moderate these costs through the localisation of skills and components, as well as pursuing some of the initiatives as regional projects. Therefore, government is also keen for their to be an acceleration of the regional power pools in Southern and Eastern Africa, as well as for critical interconnection projects to be built, so as to facilitate the creation of regional electricity markets. Such markets could substantially lower the capital investments required to develop the generation capacity required to improve access to electricity for individuals and for business in Africa.

Currently, only 42% of Africa’s citizens have access to electricity, while penetration in sub-Saharan Africa is even lower at 31%. Yearly electricity consumption per person is also the lowest in the world at 450 kW.

July 2011
The large-scale Upington solar park will boast some of the best solar resources in the world, according to research by the University of Stellenbosch.

The university’s Centre for Renewable and Sustainable Energy Studies used data on the solar potential of the area from Eskom and contracted Slovakia-based GeoModel Solar, to analyse the measured data along with 17 years of satellite derived solar data, to predict the solar resource available at the proposed site.

The long-term average direct normal irradiation (DNI) at the site was calculated to be 2 816 kWh/m2 a year and the average optimal tilt irradiation (OTI) 2 555 kWh/m2 a year.

DNI is used to predict the output of concentrated solar power (CSP) stations, where the receivers or heliostats track the sun throughout the day, while the OTI value predicts the yield of stationary, or fixed tilt, photovoltaic (PV) panels.

The university reports that the average values at the Upington site are very high, compared with Spain, which hosts several CSP plants, where typical DNI values are between 2 000 kWh/m2 and 2 200 kWh/m2 a year and North America, where DNI is in the order of 2 700 kWh/m2 a year.

The Northern Cape has been identified as an area with exceptionally high solar irradiance, higher than the areas in North Africa, where the Desertec project may be implemented.

The proposed solar park will be located near Eskom’s planned 100 MW CSP station at Olyvenhoutsdrif, which is targeted for commissioning in 2016.

June 2011
South Africa has committed R18.6-million to complete a comprehensive feasibility study for the Upington solar park. Energy Minister Dipuo Peters reported in her 2011 National Council of Provinces budget vote speech that localisation would be “vigorously pursued” in steering the project ahead.

The study will be completed by the end of July this year.

The solar park could host proven and emerging solar technologies, including PV, concentrated PV plants and CSP technologies, such as power tower and parabolic trough alternatives.

When fully developed, it could realise a total investment of more than $20-billion.

The proposed Solar Park Authority remains a key project component, with bulk infrastructure, such as water, electricity and transport solutions to be provided by different project developers.

Meanwhile, the country’s IRP2010, expects wind energy to contribute 9 200 MW, or 16% of the 2030 mix, and 8 400 MW from solar PV, or 9.4%. CSP will contribute 1 200 MW and imported hydropower a further 4 759 MW.

November 2010
In her address to the delegates at the Upington solar park conference, Minister of Energy Dipuo Peters laid down a solar challenge to the private sector and government, saying that ‘it is time the town went solar’.

The two-day conference captured the interest of more than 400 investors and solar industry insiders from all over the world. However, it was felt that the technical details on the proposed solar project were scant and needed more clarity. One of the major concerns raised related to the transmission capacity for the park. It was highlighted that an environmental-impact assessment for transmission lines alone, could take two to three years at most to complete, thus adequate transmission capacity was likely only to come online some time in 2016.

Another point of concern was the misalignment between the solar allocation in the draft IRP2010, which permits some 600 MW of solar to developed by 2019, and the 5 000 MW of energy envisaged for the park.

Meanwhile, the DoE has announced that site preparations could take place as early as 2011, once all regulatory and legislative hurdles are cleared, and solar plants, selected through the competitive bidding process, could begin producing solar energy by the second half of 2012.

Further, the department announced that it plans to start negotiating power purchase agreements with independent solar power producers in early 2011, provided that they fulfil the necessary requirements.

In terms of the full feasibility study, which is currently under way, a number of government departments, such as the Department of Trade and Industry, the Department of Economic Development and the Department of Science and Technology, in collaboration with key enterprises, such as Eskom, the Development Bank of Southern Africa and the Central Energy Fund (CEF), have been roped in to offer their services in their fields of expertise.

Eskom, in particular, has committed itself to 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 is being done.

The DoE further expects that the costs to project developers, especially those associated with pre-investment will be reduced, seeing that the State will provide infrastructure, such as water, power and transport solutions. However, it has been pointed out that private investors in the project will not receive the higher renewable energy feed-in-tariff for power generated from the solar park.

Meanwhile, the government is yet to decide on the technology to be deployed for the project.

The DoE has also announced that it is considering the possibility of developing projects that fall under the ‘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 will be able to assist in overcoming the risk barriers to demonstrate technical, as well as financial sustainability under local conditions.

Preference will be given to projects that 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 is currently developing terms of reference for Solar NDP and, after detailed consultations with the CEF, the National Treasury and other partners, expressions of interest will be sought in this regard.

October 2010
US-based Fluor Corporation has been selected to conduct a follow-up feasibility study for a potential solar park development in the Northern Cape. Fluor is required to develop a more detailed conceptual master plan, which will be unveiled at the upcoming South African Solar Park Investors Conference, planned for the end of this month.

Further, the South African government is considering the best way to mobilise industrial development around the creation of the solar park concept, which it hopes to deploy over the coming years. A prefeasibility study into the park was completed in September 2010. The town of Upington, in the Northern Cape, was also identified as the most suitable site among those submitted for consideration. The town has an indicated solar radiation index of 2 900, which is said to be even higher than that of the Mojave desert, in southern California, in the US.

Initial estimates from the prefeasibility study, which was undertaken jointly by the Clinton Climate Initiative and the DoE, indicated that an investment in the region of R150-billion would be needed to deploy the plant to full capacity.

According to the South African government, the project will require material private-sector investment and will likely embrace Eskom’s 100 MW concentrating solar thermal power plant, also being considered for Upington.

Multiple solar technologies, including the various CSP solutions and concentrating PV solutions, are being sought for the project, as profiled in the prefeasibility study; however, it is still unclear on whether the developers will opt for a variety of technologies, or will go for a specific technological model.

The deployment of a specific technology will only be advantageous in the sense that should it be adopted, it might be possible for the country to emerge as a leading supplier of specific solar solutions, which could bolster industrial development and job creation.

The most notable risk associated with such an approach will be that the country might have to pay a disproportionate portion of the research and development costs for a technology that could well be usurped by a rival solution.

The DoE also intends to establish a Solar Park Authority as a unit within the State-owned CEF, to help facilitate the advancement of the project.

Nonetheless, for the solar park concept to materialise, it will need to be factored into the final IRP2010, which has seen a number of delays. The plan will provide visibility of South Africa’s energy mix for the next 20 to 25 years.

The draft IRP2010, which was published in early October 2010, suggests that only 600 MW of solar capacity should be developed by 2019, and that various renewable technologies, worth a combined 7 200 MW, be introduced between 2020 and 2030, in addition to projects selected under the first phase of the renewable energy feed-in tariffs, as well as 3 800 MW of additional wind energy, to be introduced from 2014.

The Minister has, in the interim, argued that it will be ‘woefully wrong’ for this to be interpreted to mean that the State is not committed to the proposed solar park project. Peters stresses that the draft document is written with enough flexibility to accommodate the solar park concept, and that it remains a draft and that public input will possibly be sought ahead of Cabinet approval and eventual promulgation.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
DOE spokesperson Bheki Khumalo, tel +27 12 444 4256, fax +27 12 444 4501, cell +27 82 773 2388 or email Bheki.Khumalo@energy.gov.za; or media liaison officer Zodwa Batyashe, tel +27 12 444 4265, fax +27 12 444 4505, cell +27 82 455 9796 or email Zodwa.Batyashe@energy.gov.za.
Fluor Corporation media relations, Keith Stephens, tel +1 469 398 7624; or Brian Mershon, tel +1 469 398 7621.
Fluor South Africa, tel +27 11 233 3400.