South Africa's latest round of photovoltaic projects faces cost challenges
South Africa's latest round of photovoltaic projects faces cost challenges
Solar projects in South Africa's latest round of renewable energy procurement may struggle to make a financial settlement because of issues such as rising supply chain costs, according to people familiar with the matter.
Some bids ran into trouble ahead of deadlines to complete financing arrangements, according to people who spoke on condition of anonymity because the information was not public. South Africa's Department of Mineral Resources and Energy (DMRE) expects these projects to close in April.
One person familiar with the matter said photovoltaic plants were experiencing supply chain problems as transport costs soared. Between January 2020 and November 2021, for example, freight rates in China increased 476%, while polysilicon prices rose 365%, according to the BloombergNEF report.
Mainstream Renewable Power, backed by Kjell Inge Rokke's Aker ASA, is developing 450 MEGAwatts of solar projects selected last year in South Africa's fifth clean Energy auction for private developers. Their six projects are the cheapest at R374.79/MWh.
A DMRE spokesman said: "We have not received any formal submissions from preferred bidders on these issues." "Our aim is to complete the financial settlement of the fifth round as planned."
Any delay in the projects would mean further delays in South Africa's efforts to add capacity to a grid that is currently unable to meet demand, leading to record blackouts last year. Plans to expand renewable energy auctions and bring more power plants online have fallen behind schedule.
In the fifth round, 1,000 MW solar projects at a weighted average price of R429/MWh and 1,600 MW onshore wind projects at R495/MWh were selected. (This article is from New Energy Intelligence Agency.)
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