RE

Sasol sets sights on large-scale renewables procurement as it pulls trigger on embedded generation projects

Sasol sets sights on large-scale renewables procurement as it pulls trigger on embedded generation projects

Photo by Creamer Media
Sasol's Secunda complex stands in the background with power lines in the foreground

4TH AUGUST 2020

BY: TERENCE CREAMER
CREAMER MEDIA EDITOR

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Chemicals and energy group Sasol intends issuing, during its current financial year, a request for proposals (RFP) for wind and solar projects with a combined capacity of between 200 MW and 300 MW having received a strong response to a market-testing request for information (RFI) issued in May.

Business Development, Technology and SHE VP Kribs Govender tells Engineering News that some 100 independent power producers (IPPs) responded to the RFI, providing details of more than 220 potential projects .with a combined capacity of over 7GW.

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The responses have helped inform the JSE-listed group’s renewable-energy strategy, including a decision to kick-start the roll-out with two embedded solar photovoltaic (PV) projects of 10 MW apiece.

These small-scale projects are to be deployed at Sasol’s operations in Secunda, in Mpumalanga, and Sasolburg, in the Free State.

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An RFP for the two 10MW projects was released on August 3, with the closing date for submissions set for Friday, October 2.

Successful IPPs will be expected to design, finance, construct, operate, maintain and own the facilities, as well as the associated connection infrastructure.

The plants, which will be connected to Sasol’s existing network infrastructure, are expected to be operational in 2022 and the IPPs will be remunerated by way of a 20-year power purchase agreement with Sasol.

Govender explains that the project size has been limited to 10 MW to align with the threshold set for the licensing of own-generation plants prior to the new IRP 2019 with the National Energy Regulator of South Africa (Nersa).

In Sasol’s view, projects larger than 10 MW can only be licensed by Nersa if they are allocated for in the 2019 IRP or are categorised as embedded generation.

While implementing the embedded-generation projects, Sasol will finalise a “roadmap” for the deployment of larger-scale solar PV and wind generators in line with its vision of integrating about 600 MW of renewable energy into its South African operations by 2030.

Once finalised, the roadmap will be shared with the Department of Mineral Resources and Energy in an effort to ensure that Sasol is able to secure a portion of the 500 MW a year that has been set aside in the IRP 2019 for distributed generation capacity.

Govender tells Engineering News that it is possible that the initial deployment phase will include several embedded-generation plants, as well as electricity procurement from larger-scale wind and solar farms.

“Based on the RFI that was released in May 2020 for the 600MW, We are aiming to have between 200 MW and 300 MW installed by the 2024/25 financial year.”

Land has already been earmarked for the renewables projects at both Sasolburg and Secunda, with the land parcel in Secunda having previously been used for coal mining.

The plan to procure 600 MW of renewables capacity forms part of the group’s broader aspiration to reduce greenhouse gas emissions by 10% by 2030.

Govender stresses, however, that the business case for the projects is also strong, particularly in light of recent falls in wind and solar PV costs.

He refuses to be drawn on Sasol’s tariff expectations, saying only that these will be competitive when compared with Eskom’s industrial tariffs, which have risen steeply over the past decade and which are expected to continue to rise ahead of inflation.

Owing to the group’s current balance sheet pressure there is no intention for Sasol to take an equity position in the initial projects.

This position may change, however, for the renewables projects deployed from 2025 onwards, Govender reveals. 

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