Nersa gives the green light to the first two private 100 MW generation projects

The energy will be produced in the Northwest and transferred to the operations of Tronox Mineral Sands.

  • The National Energy Regulator of South Africa has registered two new 100 MW solar projects.
  • The solar projects are located in the Northwest and will generate power for Tronox Mineral Sands.
  • It took 73 days to register the projects.

The first two projects that make use of license exemptions for generation plants up to 100 MW have been successfully registered with the National Energy Regulator of South Africa (Nersa).

According to the new regulations – issued in August 2021 – power generation plants up to 100 MW do not require a license. However, they must be registered.

The two projects that have been approved are developed and managed by the Sola Group and will generate power for Tronox Mineral Sands operations in five facilities. They will be located in the northwest of the local municipality of Ditsobotla.

The energy will be transported – via the Eskom transmission grid – to the Namakwa sand mine on the west coast. It will also power the Namakwa Sands mineral separation plant and the Namakwa Sands smelter. Energy will also be transferred to the KwaZulu-Natal Sands Central Processing Complex and the KwaZulu-Natal Sands Fairbreeze Mine.

The projects are over 51% owned by blacks and have a collective investment value of R3.2 billion.

They will also have 28 GWh of excess energy per year, which Sola is seeking to market to other interested customers connected to Eskom’s grid.

Gruppo Sola noted that the regulatory changes are significant as the registration process is much faster and “less onerous” than applying for a generation license. Registration of projects took 73 days from submission.

“The significance of this first move is that it will pave the way for many other large-scale private projects to receive approvals to contribute to the grid’s generation capacity,” said Dom Wills, CEO of the Sola Group. “Furthermore, this is a clear signal to the market that private power is achievable and there are private lenders excited to finance this market,” Wills added.

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The projects are expected to reach financial close in July, so they will be built in 14 months. They will have an expected duration of 30 years, according to a statement by the Sola Group.

South Africa is currently battling load shedding as Eskom’s generation capacity is limited. The license exemptions, however, are expected to unlock investments in the energy sector to help bridge the generation capacity gap of 4,000 MW to 6,000 MW.

The Presidency is also working to speed up the implementation of electricity generation projects.

“To accelerate these projects, we have established a joint government-industry working group that meets weekly to remove many of the constraints. All of this is important to help alleviate the electricity shortage,” said Rudi Dicks, head of the project management office at the Presidency.