- POWGEX-HYFI says it has landed its 1st order for green energy generation with up to 30 GW capacity in South Africa
- The projects are planned to be located in Mpumalanga province that currently has only 6.5 GW readily available generating capacity, as against 22 GW transmission capacity
- The JV between BioPower and POWGEX Energy will start work with 1 GW initially for which it has found solar panel and storage supplier
A joint venture (JV) between sustainable funding solutions provider BioPower Operations Corporation and green energy developer POWGEX Energy, POWGEX-HYFI has secured a contract to establish green electricity generation facilities with up to 30 GW solar PV capacity in South Africa’s Mpumalanga, starting with an initial 1 GW project. BioPower operates as HyFi Corp.
The JV called the contract for up to 30 GW as its 1st significant green electricity generating facilities order.
POWGEX-HYFI said it has been invited to provide an initial 1 GW solar power plant, with future expansion between 5 GW to 30 GW within the larger Mpumalanga region. All projects are aimed to have a working life of 45 years.
The province’s grid can accommodate around 22 GW transmission capacity, but it currently has only 6.5 GW of readily available generating capacity, it added.
Initial 1 GW solar project is to be built for $2.5 billion with installation work scheduled to begin in Q1/2024. Cost will cover solar panels, battery storage, EPC and O&M expenses. It has already selected solar panels and storage company for the facility. POWGEX-HYFI is now in the process of hiring a ‘world leading’ EPC and O&M contractor.
“This is the first of what is expected to be multiple orders from municipalities looking to contract directly with POWGEX-HYFI and establish long-term Power Purchase Agreements (PPAs),” added the JV in a press release.
Project partners are now working towards bringing in finance to realize the projects through global lenders and funders. They are also arranging a $450 million private placement for the 1st tranche of the JV.
South Africa’s power woes are not a new development. As the country’s only electricity utility Eskom operates ageing power plants, long term power outages have become frequent prompting government to accelerate renewable energy deployment, thus welcoming private operators into the power sector and incentivizing clean energy.
In January 2023, the government said it plans to procure around 15 GW new wind, solar and storage capacity through competitive auctions. It has also reduced local content requirement for solar panels from 100% to 30% (see South Africa To Launch Tenders For Around 15 GW RE Capacity).