Suzlon Signs 200-Turbine Deal With SA Wind Developer - 9 months ago

Global wind-energy equipment supplier Suzlon Energy reported on Wednesday that it had signed a contract with African Clean Energy Developments (ACED) for an initial 76 turbines for the Cookhouse project, which is being proposed for South Africa’s Eastern Cape province. An engineering, procurement and construction contract, as well as an option for an additional 124 turbines for Cookhouse, has also been concluded, but no contract value is being provided.

ACED is a joint venture between Macquarie Capital and African Infrastructure Investment Managers, which is affiliated to the Old Mutual Investment Group. It is seeking to develop the project, sited near the Coega industrial development hub.

Cookhouse has reportedly already received a positive record of decision for its environmental-impact assessment and its developers believe it could be a frontrunner when South Africa eventually begins procuring renewable energy capacity.

However, a number of regulatory and policy impediments remain, with the National Energy Regulator of South Africa announcing this week that the outcome of its renewable energy feed-in tariff (Refit) review, which could result in a steep cut in tariffs to all renewables projects, has been delayed until mid-June.

Some developers have warned that the cuts could make projects marginal or unbankable, while proponents of the reduced rates argue that the initial Refit, promulgated in 2009, incorporates tariff that were too high when compared with international norms.

Suzlon chairperson and founder Tulsi Tanti, who is in South Africa this week, tells Engineering News Online that the company remains optimistic about prospects for wind energy and the Cookhouse project, which he says could be delivered over a period of between 12 and 15 months from the conclusion of a power purchase agreement (PPA).

He adds that delays are common for the renewables sector, particularly emerging market, and that the South African delays have, therefore, not been overly frustrating.

In fact, he believes that, given South Africa’s 30 000-MW wind potential and the commitment to wind shown in the Integrated Resource Plan, up to 10 000 MW of wind capacity could well be developed by 2020.

Suzlon, which set up local operations last year under the leadership of former City Power head Silas Zimu, aims to emerge as the market leader and is already working on plans to manufacture its systems locally. Tanti says these plans should be in place within three years, with the current focus being on vendor development and on staff and supplier training, which is taking place in India and Germany.

He also believes its all-inclusive offering, from turbine manufacture and installation, through to operation and maintenance of the facility, positions it well to capture the leadership position it covets in the domestic market.

The company, which is the world’s fifth largest wind turbine supplier, measured on cumulative installed capacity, has successfully deployed the same model in other emerging markets, particularly India, where it is the wind-market leader.

“We are very excited by this opportunity to bring to the table our vast emerging markets experience from India, China, Brazil and others,” he elaborates.

At Cookhouse, Suzlon will not only supply its 2-MW, S88 series turbines, but would also be responsible for all associated infrastructure development and the operations and maintenance of the facility.

ACED MD Thomas Donnelly describes Cookhouse as its “flagship” South African project, and says the relationship with Suzlon should help it deliver on its local economic development and job-creation commitments.

The contract is conditional on Cookhouse securing a PPA under the South African Refit procurement process, which some believe could still begin this year, ahead of the UN Climate conference, which will convene in Durban in November.

Based on current expectations for the satisfaction of the main conditions, ACED and Suzlon believe that installation could commence in late 2011 or early 2012.

ACED is also working closely with the Industrial Development Corporation and has mandated Standard Bank and Nedbank as lead arrangers in finalising a financing package, which will include a significant broad based black-economic empowerment component.

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