Page 26 - Energize November 2021

NEWS

Wind farm O&M renegotiation

T he renegotiation by EIMS Africa of one of their wind farm operation and

maintenance (O&M) agreements indicates a maturing renewable energy sector.
As part of the South African government’s first round (R1) of the Renewable
Energy Independent Power Producers Procurement Programme (REIPPPP), one of
the EIMS Africa Wind Farm projects, the Cookhouse Wind Farm in the Eastern Cape,
commenced its twenty year commercial operations period, in 2014.
At the time, South Africa’s renewable energy sector was a nascent industry and
like most Independent Power Producers (IPPs) at the time, investors and lenders were The net result for the shareholders has been
concerned about long term operational risk and chose to include the option for an both a significant financial saving and a complete
O&M contract for the full 20-year operations period. realignment of risk allocation with current market
Five years later, the industry had matured significantly and EIMS Africa reviewed standards, including increases in both performance
the Cookhouse O&M Agreement against the latest industry standards in terms of warranties and performance security packages,
price, scope and risk allocation. The conclusion was that the price, risk allocation and and a performance incentive scheme for the
security package were not in line with the current market norms and the loser was the OEM. Since conclusion of the new agreement
shareholders of the Project. in 2019, Cookhouse Windfarm has achieved an
At the time, 2018, the idea of moving away from the wind turbine OEM was Energy Based Availability of over 99% which has
unheard of in South Africa, although there had been instances elsewhere in the world, played a significant role in revenue for the project,
usually as a result of OEMs being bought out by competitors. exceeding budget for the last few years.
Preceding the decision, significant research by the EIMS Africa team was The crowning accomplishment has been the
undertaken. This included looking into lessons learnt within the international market, inclusion of an obligation by the OEM to fund a
examining how this had been achieved, as well as detailed due diligence and site visits wind turbine technician trainee program and a
to Australia. local SMME supplier development programme.
Through these international site visits and interviews with IPPs and O&M The initiative was conceived, negotiated and
providers, who had moved their O&M service provision away from OEMs, the team closed by the EIMS Africa team, with both the
gained enough insight to consider their own options. project and the local community emerging in a
The final phase of this renegotiation was a competitive procurement process much better position.
by the EIMS Africa technical team. Two bidders were shortlisted, and detailed
negotiations began. After almost a year of negotiations, the EIMS Africa team Contact EIMS Africa, Phone 011 789-7170,
concluded a new O&M agreement. mail@eims.co.za, https://www.eims.co.za/

Solar firm celebrates winning 273 MW in REIPPPP BW5

catec has been awarded Preferred Bidder status on three solar projects totalling 273 MW,
by the Department of Mineral Resources and Energy in South Africa under the Renewable
SEnergy IPP Procurement Programme (REIPPPP).
“This is another great milestone for Scatec in South Africa and for renewable energy in
the country. We are pleased with the South African government’s commitment to the REIPPP
programme and its announcement within the set timeframe. This award is a manifestation of
our position in South Africa as the leading solar IPP,” says CEO Raymond Carlsen.
Under the programme, Scatec will sell power from the solar plants under a 20-year
Power Purchase Agreement. The company will own 51% of the equity in the projects with
H1 Holdings, its local Black Economic Empowerment (BEE) partner owning 46,5% and a
community trust holding 2,5%.
Scatec will act as the engineering, procurement and construction (EPC) provider and
provide operation and maintenance as well as asset management services to the power plants.
Financial close is expected in the first half of 2022 with grid connection and commercial
operation by the end of 2023.

Contact Aidan Wildschut, Scatec, Phone 079 613-7155,
aidan.wildschut@scatec.com, https://scatec.com Raymond Carlsen

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