By Stuart Lowman
I remember a song from way back, possible when I was still in diapers – Who The **** Is Alice. Felt appropriate today but the words would have been changed to – Where The **** Is De Aar… Spent the day with PiA Solar on the construction of a 90MW solar farm.

Made our way there on an 8-seater but the dirt-road runway was a shot-stopper. Apparently the cows were politely asked to vacate the area on our descent. All is well though as all of us made it back in one piece.

The venture is another shot in the energy arm, just wish government would drop nuclear, the cost per kilowatt per hour is not even comparable. Oh and no risk of a Fukushima. And by the way De Aar is in the Northern Cape. (read more about the project in Axel Pustet’s speech below)

Speech by Axel Pustet, director of business development at PiA Solar*
In my role as Business Development Director of PiA Solar I would like to highlight our future in the PV Solar Industry in South Africa and all over Africa.
Our excellent operations teams, as well as the innovative engineering department, make it easy to be an attractive partner for the industry in Africa. Living and working in Germany until three and a half years ago I couldn’t imagine that a purely South African company is capable to be on par with the European competitors.
Or even passing them. In this short time period that is exactly happened.
I remember the times 2 years ago: we were busy installing Kalkbult and 2 other 75 MW farms, the decisions for the round 2 of the REIPPP for construction in 2014 have already been made, and there have been 6 huge projects in the market, which we quoted on.
There were not many other projects in the market. In 2014 the general picture changed slowly. We had to increase our tact rate in getting offers (and designs), out and this year we call a crazy year for the industry. On average we sent out one quote per calendar day!
There are good reasons for that. The whole world is now aware that we need to go renewable much faster that we intended to do. Costs seem to be only an issue with companies that have a short term view.
The world climate conference seems to be the first one where all the major states understand the challenge, and recognise it as one of the most important tasks of mankind in these days.
But, the major reason is that renewable energy became very competitive.
A short review of the prices per kWh in the REIPPP:
– Round 1 (2013 construction) about R2.50 per kWp
– Round 2 (2014 construction) about R1.60 – R1.80 (these aren’t exact figures)
– Round 3 (currently under construction) R1.10 – R1.20
– Round 4A started with about 83 cents and rumours say, that the recent bids which went in beginning of November went down to 63 cents per kWh at the minimum, with many other projects in the range of just below 70 cents.
70 cents per kWh is a range which is already highly competitive to conventional coal power as well as to nuclear power.
Next week there will be a hearing for the EIA (Environmental impact study) in Port Elizabeth, which reminded us of the incredible plans to build a nuclear power plant just outside Port Elizabeth.
Besides the fact, that nuclear power still bears risks for humans and the environment, not only during operations and uranium mining, but also during the de-commissioning of the plant you have to keep control about the nuclear waste over centuries.
To install a nuclear power plant anywhere in the world takes between 12 and 15 years, and the initial budget is exceeded on a regular basis.
There are huge, short-term, interests in a nuclear power plant. This is what makes it so attractive for the players in the market.
By the time work has been completed on the nuclear power plant it will be obsolete, because the cost of power production will be too high. Solar can already produce power at a lower cost than nuclear.
Then let’s look at capacity. The Nuclear Power Plant is planned with a capacity of 4 GW installed power.
Compare this to solar, and what has been allocated in the bid windows:
Round 1: 632 MW PV Solar, 634 MW Wind, 150 MW Concentrated Solar, in total 1,416 GW
Round 2: 435 MW Solar, 787 MW Wind, 200 MW Concentrated Solar, in total 1,044 GW
Round 3: 435 MW Solar, 787 MW Wind, 200 MW Concentrated Solar, in total 1,456 GW
This is totalling to 2,8 GW installed capacity.
We believe this is one of the reasons load-shedding this year is much less compared to the same time last year. I’m sure you remember Christmas 2014.
Round 4 will be constructed in 2016 and 2017. PV Solar was allocated 835 MW in Round 4A and 4B, and there will be another 400 – 600 MW at this fantastic price of below 70 cents per kWp allocated in Round 4C. Wind is about the same capacity in addition to that.
There have been more than 100 projects in the bid, which will be not selected in this round. They have a total capacity of approximately another 7 GW of completely developed PV projects, financed and with full regulatory compliance such as an EIA.
Then there is the speed of adding power to the grid.
This PV park here in de Aar will have been completed in about 8-9 months. In parallel we are working in Prieska (also 75 MW). There, on the other side of the road, another park is going up of the same size.
The REIPPP is only a part of the story, but it is hopefully a very successful one for PiA Solar. I would say, based on our design combined with the exceptional relationship with our South African supply base, the highest local content in the market and the excellent partnership with our project funder IDC, we are in a very, very good position to get the major part of the projects and contribute to the growth of the PV industry in South Africa.
But: what made us very busy this year (remember: we got one offer per day out) are small, private, commercial project in South Africa.
This market, even though the regulations of NERSA for the grid connection rules are still outstanding and ESKOM don’t allow 400V connections, is estimated to about 100 MW installed capacity just in 2015.
This will be installed by private initiative and funding. Personally I expect that this number will be at least doubled every year. This is the experience in other markets.
The other one is the international projects: every month we receive more and more requests for proposals. We have already built a plant in Zambia, and have orders or binding letters of Intent for projects in Kenya, Ghana, and Uganda. Quotes are out to many countries as far as Egypt and Jordan.
We have been competitive against European substructure companies for some time. In fact, we won most of these projects before the collapse of the rand, and even though raw steel prices are higher in South Africa than they are in Europe, and especially in China or India.
But, the current exchange rate is compensating that disadvantage and makes us really a preferred partner all over Africa. We are aware, that there are discussions about import taxes for foreign raw steel.
This would drive the costs for SA steel up, and would impact negatively our export capabilities. We have grown up based on South African steel and we really would like to keep it that way.
- Axel Pustet is PiA’s director of business development. After a varied career in the engineering field in Germany Axel joined the team of Scatec Solar in 2009 as Vice-President of project execution. Here Axel was instrumental in the construction and engineering of carport/ground mount projects worldwide valued at €500 – 600m (US, India, Italy, France, Germany, South Africa, Czech Republic & Jordan). Axel created and led international teams for Scatec’s EPCI/M business model and was also responsible for driving business development and project opportunities (40% of all projects constructed by Scatec in 2011). Axel’s exceptional expertise is a key contributor to PiA’s continued success. With a wealth of experience in the development and construction of solar solutions throughout Europe, Axel adds significant industry experience to the PiA Solar management team & ownership structure. After qualifying with a Masters Diploma in electrical engineering in 1992 Axel joined the technical department at VATECH SAT GmbH (Vienna/Munich), a company specializing in automation techniques and telecontrol engineering. Here Axel was responsible for project management and programming of process control, closed loop control and SCADA systems. In 2000, Axel moved to IPC fab Automation (specialists in hardware and software designed to increase the efficiency of semi-conductors) where he was responsible for accounts management & technical support of key international customers including IBM, ST Microelectronics & MKS Instruments (all based in the US). In early 2003 Axel moved to Siemens Energy Automation GmbH. Based primarily at the BMW plant in Regensburg, Germany, Axel was the responsible integrator for electronics on the 1 series, Z4 & BMW 3 Convertible models. Axel was also responsible for plant integration and interface with the development plant in Munich. In 2009 Axel joined the team of Scatec Solar as Vice-President of project execution. Here Axel was instrumental in the construction and engineering of carport/ground mount projects worldwide valued at €500 – 600m (US, India, Italy, France, Germany, South Africa, Czech Republic & Jordan). Axel created and led international teams for Scatec’s EPCI/M business model and was also responsible for driving business development and project opportunities (40% of all projects constructed by Scatec in 2011).