BuaNews (Tshwane)
Shaun Benton
3 August 2006
Cape Town — The City of Cape Town has signed a 20-year power purchase agreement with a wind energy producer that will generate an estimated 13.2 Gigawatt-hours per year of "clean" electricity.
In the national pilot project, Darling Wind Farm will initially use four wind turbines to feed electricity into the national grid that will then be "wheeled" through the national grid and onwards to suppliers who have chosen to pay a 25c per kilowatt-hour (kWh) surcharge to receive a "green" power supply.
The R70 million wind farm will start operating in Darling, a small town north west of Cape Town, from next year, now that it has secured the assurance of demand by the City of Cape Town, whose officials said the power it would initially generate would be enough to supply half the energy needs of the Cape Town Civic Centre, which houses the metropolitan government offices.
The innovative, sustainable energy project is the result of a partnership between national government, the Danish government, the Central Energy Fund and the Darling Independent Power Producing Company, which will draw on a loan that it can now secure from the Development Bank of Southern Africa, with a provision also for future black economic empowerment.
This is the first commercial wind farm venture in South Africa and its success and financial sustainability will initially depend on largely business consumers that are prepared to pay premium rates for the power it will produce, which will be sold by the city.
With widespread concern rising over the global warming caused by the burning of fossil fuels such as coal and oil, which add to the greenhouse gases that are said by scientists to now be at their highest levels, officials expect to sell the electricity onwards to an initially small but willing market.
Hermann Oelsner, the chief executive of Darling Wind Power and vice president of the World Wind Energy Association, on Thursday signed the 20-year power purchase agreement with the Mayor Helen Zille and City Manager Achmat Ebrahim, who called the agreement a milestone that would unlock the investment necessary to allow the project to proceed.
Mr Oelsner, a dedicated enthusiast of environmentally friendly and renewable energy, said the signing of the agreement was the culmination of a 10-year process to establish wind energy as a sustainable source of electricity in South Africa.
He added: "The ratification of the power purchase agreement is facilitating a unique and innovative partnership between local and foreign private investors, the national government, municipal government and the community of Darling, which will be an equity shareholder in the project."
City officials expect the first customers to be businesses which would pay the surcharge on a tranche, or blocks, of the green electricity, while paying the standard rate of around 40c a kilowatt-hour on the balance of their supply.
These initial customers would then be in a position to showcase their "green credentials" when they market their products in South Africa and, especially, abroad, where consumers are increasingly eager to mitigate the effects of global warming by reducing greenhouse gases.
Mr Oelsner said that without power purchase agreement it would not have been possible to secure the necessary investment that would finance the initial purchase of four wind turbines, in the shape of 17-storey-high towers with three massive blades that would each power 42-ton engine rooms located at the top of the towers.
He said that Darling Wind Farm planned to later add another six wind turbines to the wind farm, followed by another 10 in the longer term, adding that global demand for the wind turbines was so high that the earliest additional wind turbines would be available only by 2008.
National government has set a target of an additional 10 000 Gigawatt-hours a year in renewable energy for the national power grid by 2013, and Public Enterprises Minister Alec Erwin has stated that government's aim is for independent power producers to contribute around 30 per cent of South Africa's electricity.
The City of Cape Town intends sourcing about 10 per cent of its energy from renewable sources - which could include solar and other forms of energy - by 2020.
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