Wind power lifts the town

2015-04-26 15:00

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Clean power, community upliftment and more economic prosperity – this is what the Jeffreys Bay Wind Farm has delivered. And there are more of these projects on the horizon countrywide, writes Yolandi Groenewald

Over the past three years, Jeffreys Bay has witnessed the rise of a new, clean-power plant on its doorstep. Situated between the town and Humansdorp in the Eastern Cape, the Jeffreys Bay Wind Farm’s turbines span more than 3?700 hectares and have been feeding clean energy into the grid since May last year.

In a power-constrained grid, the farm came online just when power utility Eskom needed it most. It now feeds electricity to more than 100?000 South African homes, providing clean, renewable energy to the tune of 460?000 megawatt hours (MWh) a year.

The farm has taken three years from when the consortium was awarded the project in the first bidding round of South Africa’s renewable energy independent power producer procurement programme to bringing it on line, on time and on budget in May last year.

Each of its turbines has an 80m?tower and three 49m-long blades. Power is fed into a 132?kilovolt transmission line from a substation built to Eskom’s specifications.

But the wind turbines dotting the Eastern Cape landscape have also brought new opportunities to Jeffreys Bay communities, including jobs and economic development.

Jeffreys Bay Wind Farm’s socioeconomic development programme has already invested more than R7?million in local communities.

Mark Pickering, general manager of the wind farm, said: “Our development programme will impact positively on the communities in the Humansdorp, Hankey and Patensie areas, with a particular focus on education, health and women.”

The wind farm is only one of many renewable programmes that are slowly changing the way South Africa generates power.

With the announcement of the latest round of renewable energy projects, South Africa now has

79 renewable power plants operational or under construction. This represents a generating capacity of 5?243MW and R169?billion in private investment.

Some of the wind-energy projects in the latest round of bidding have a tariff of 60c per kilowatt hour, well below Eskom’s average tariff of 76c/kWh.

The Jeffreys Bay Wind Farm, selected in round one, signed a 20-year power purchase deal with Eskom.

The Development Bank of Southern Africa (DBSA), with Globeleq, Old Mutual and Mainstream Renewable Power, invested in the creation of the R3?billion farm.

Shareholders include independent power producer Globeleq, Old Mutual’s Ideas Managed Fund, in which local pension fund money is invested, the black-owned Thebe Investment Corporation, global renewable energy developer Mainstream Renewable Power, Enzani Technologies, Usizo Engineering and the Amandla Omoya Trust.

The trust, a local community entity, has a 6% stake in the farm, which is significantly higher than government’s minimum threshold of 2.5% local ownership.

To finance its share, the trust secured a loan from the DBSA. The loan will be repaid through shareholder dividends generated by the project.

Once repaid, the trust is expected to use its share of the dividends to benefit the local community.

Neville Gabriel, independent trustee of the trust, said the trust’s purpose was to redress past inequities, promote social development and cohesion and assist in the development of poor and disadvantaged communities in the immediate and surrounding vicinity of the wind farm.

“This is an exciting step for us and the local community, who derive financial profit from the wind farm,” he said.

The farm was funded partly through equity and partly through debt.

The DBSA played a prominent role in the initiative, delivering senior debt financing with Absa Capital, Liberty Group and Sanlam to partly finance the development, construction and commissioning of the wind farm. In addition, the DBSA provided black economic empowerment (BEE) equity financing designed to facilitate the acquisition of equity shareholding by BEE investors.

One of the farm’s biggest spin-offs has been the creation of economic development opportunities for the local community.

Procurement in the renewable programme was structured in such a way that each utility-scale wind farm has to invest a percentage of its revenue towards socioeconomic development and, in some cases, enterprise development in the areas surrounding the farm. Shares in the wind farm project company are allocated to an entity representing local residents within a 50km radius.

Marion Green-Thompson, economic development manager for the wind farm, said: “We are determined to get it right from the onset – so we don’t base our programmes on assumptions, but follow substantial research.

“We strive to ensure the most appropriate and meaningful use of resources. After all, we have an opportunity to make a real difference in the lives of thousands of children and community members and, in essence, positively impact a generation of people.”

Mercy Cwayi, project director of the On Eagles’ Wings Multipurpose Centre, has seen how the wind farm has changed the lives of people in her community.

“The help we have received from the farm has strengthened our community. We can now do more,” she said.

Cwayi’s centre offers counselling, education and life skills to women and children experiencing domestic violence and rape.

The KwaNomzamo Home Community Based Care project in Jeffreys Bay also received a donation from the wind farm, which is part of its socioeconomic development programme that has already invested about R2?million in local communities over the past 12 months.

Project manager Monica Majola said: “The assistance we have received has helped a lot to improve the lives of vulnerable people in the community.”

The wind farm also used local businesses when procuring supplies during construction and, since its completion, does so for maintenance.

Now that it is in operation, the Jeffreys Bay Wind Farm employs 11 people to operate and maintain it.

Reported by City Press and supported by the Development Bank of Southern Africa

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