South Africa’s energy sector is set to receive a major boost as Saudi Arabia’s Acwa Power has signed a power purchase agreement for the country’s largest hybrid dispatchable renewable power project. The project, named DAO, will combine solar photovoltaic and battery storage technologies to deliver clean and reliable electricity to nearly 200,000 households.
The project, which has a total cost of nearly $800 million, is currently under construction and its investor consortium includes Acwa Power as the lead developer, Thebe Investment Corporation, and Aventro Investments. It is expected to commence operation by the second quarter of 2026.
According to Acwa Power, the project will be equipped with the “largest solar photovoltaic installation in the country of 442 megawatts”, as well as one of the largest battery storage systems in the world, offering 1,200-megawatt hours of storage capacity. This will enable the project to provide electricity even when the sun is not shining, making it a hybrid dispatchable renewable power plant.
The project is part of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which aims to diversify the country’s energy mix and reduce its dependence on coal-fired power plants. The REIPPPP has been hailed as one of the most successful renewable energy programs in the world, attracting over $20 billion of investment and creating over 40,000 jobs since its launch in 2011.
The project is also aligned with South Africa’s commitment to the Paris Agreement on climate change, as it will reduce the country’s greenhouse gas emissions by about 1.2 million tonnes per year. Moreover, the project will contribute to the social and economic development of the Northern Cape province, where it is located, by creating more than 1,000 construction jobs and 100 permanent jobs, as well as supporting local businesses and community initiatives.
Marco Arcelli, chief executive of Acwa Power, said: “Project DAO is set to be yet another Acwa Power flagship project in South Africa, following the success of the Bokpoort and Redstone CSP projects, in offering clean energy to the country. We are proud to play a key role in supporting South Africa’s decarbonization efforts, and are grateful to our partners for contributing to our mission to reliably and responsibly deliver power and desalinated water at an affordable cost.”
The project is one of several renewable energy projects that Acwa Power, which is backed by the Public Investment Fund, has developed or invested in across the African continent, including Morocco, Egypt, Ethiopia, and Senegal. The company has operations in 12 countries across the Middle East, Africa, Central Asia, and Southeast Asia, with a portfolio of 77 projects worth $82.8 billion.
The signing of the power purchase agreement for Project DAO comes amid a wave of renewable energy investments in South Africa, as the country seeks to address its chronic power shortages and transition to a low-carbon economy. In September, the government signed agreements with three independent power producers for wind power projects totaling 420 megawatts, out of the 2,583 megawatts that were meant to be procured in the fifth bid window of the REIPPPP. In May, the country’s largest renewable energy project, the 100-megawatt Redstone concentrated solar power plant, achieved financial close.
South Africa has set a target of generating 42% of its electricity from renewable sources by 2030, up from about 10% currently. The country has abundant solar and wind resources, as well as the potential for biomass, hydro, and geothermal power. According to the Renewable Energy Data and Information Service, a platform developed by the Department of Mineral Resources and Energy, South Africa had 6,422 megawatts of installed renewable energy capacity as of June 2021, comprising 4,215 megawatts of solar photovoltaic, 2,092 megawatts of wind, 100 megawatts of concentrated solar power and 15 megawatts of biomass.
With the completion of Project DAO and other renewable energy projects in the pipeline, South Africa is poised to become a regional leader in green energy and a model for other African countries to follow.
Source: The National
