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Finance risks ease as South Africa enters Round 4 bidding

4/8/2015

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PictureLocated in the Nelson Mandela Bay Metropolitan Municipality of the Eastern Cape province, the 61.5 MW Grassridge wind farm consists of 20 Vestas V112 wind turbines, each with a unit capacity of 3.075 MW. The Grassridge wind farm is the first of the three projects awarded to EDF Energies Nouvelles in 2012 under the competitive tender for renewable energies projects held by the South African government.
As the original wind farms awarded under Rounds 1 and 2 of the REIPPP are starting to come online, Round 4 is beginning to see reduced financial risk. We check in with two individuals involved in both rounds.

By Susan Kraemer

Vestas supplied the 2 MW turbines for West Coast One which was awarded Preferred Bidder status in Round 2; achieving financial close and a 20 year contract with Eskom for the 90 MW wind farm in mid 2013. James White, South Africa Country Manager for Vestas, was their first employee in the country seven years ago, giving him a unique overview of the developing programme.

Wind industry built from scratch

“Round 1 was when everything was new,” says White. “Our key challenges were in employing the right people, making the right equipment, like trailers and main cranes available, and educating subcontractors on delivering the correct specs, for example, with foundations.”

The biggest risk for any business is inexperience, and in Round 1, that was exactly the situation. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) forcibly created an indigenous wind sector supply chain, with its local content rules governing up to 60% of a project.

Looking back at how Vestas coped with local inexperience in developing the South African market, White is satisfied with progress. "The only thing we would have done better is maybe to have hired people a bit earlier and afforded us the luxury of further training. But in the end this was not a major problem and I wouldn’t change how we have delivered in this market at all,” he says.

Read more.......

2nd Annual Wind Energy Summit, Cape Town 16/04/2015 - 17/04/2015, Cape Town, South Africa
South Africa’s leading wind energy summit is back in Cape Town for its second year! Come and listen to 2015’s most qualified wind energy experts speak about how to implement the financial and legislative changes which will continue to drive industry success into the future.

Read more....
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