ACWA Power Signs PPA for Its South African Clean Energy Project

9 Jan 2024
ACWA Power Signs PPA for Its South African Clean Energy Project

Saudi clean energy leader ACWA Power has signed a power purchase agreement (PPA) for its Project DAO solar plant, a 150MW renewable energy and battery storage system being constructed in Groblershoop, Northern Cape, South Africa.

Mr. Ashley Singh, ACWA Power Project DAO signatory and Honourable Gwede Mantashe, the Minister of Mineral Resources and Energy signed the implementation agreement, while the PPA was signed with Mr Segomoco Scheppers representing the utility Eskom.

ACWA Project DAO is jointly owned by lead developer ACWA Power, Thebe Investment Corporation Pty, and Aventro Investments Pty. The plant when completed will have the largest solar PV installation in the country at 442MW and about 1,200MWh of battery storage, one of the largest in the world. The plant is scheduled to begin operations in the second quarter of 2026. 

The project was approved as one of the preferred bidders in South Africa’s Risk Mitigation IPP Procurement Program (RMIPPPP) in 2021 with the lowest tariff. South Africa launched the RMIPPPP in 2020 to close its power supply deficit and replace diesel generators with cleaner options. 

Marco Arcelli, CEO of ACWA Power stated that the company is “firmly committed to leading the energy transition in high-growth markets, and we are proud to meaningfully contribute to the socio-economic development of South Africa…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 and significant socio-economic value to its surrounding communities.”

ACWA Power already has a footprint in South Africa. The company constructed and commissioned the 50MW Bokpoort concentrated solar plant (CSP) thermal energy power plant in 2016 and reached financial close for the 100MW Redstone CSP in May 2021. 

According to a statement from ACWA Power, the $800m ACWA Project DAO will also comprise significant transmission infrastructure development including “both transmission substation capacity upgrades and a new distribution station”. 

ACWA Power says that this transmission capacity reinforcement will facilitate grid access for other renewable projects in the area and alleviate congestion in the Northern Cape grid. The project will procure about 50% of the construction materials from local content and create over 1,000 construction jobs at peak - with about 25% from the local community.

In 2022, ACWA Power had a portfolio of over 68 assets with a gross capacity of 44.4GW of which 39%  is renewable. In addition to leading the energy transition in Saudi Arabia, ACWA Power is also set to expand its operations in Africa and become a larger clean energy player on the continent.

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