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© Webber Wentzel 2013 ESKOM CSP / SOLAR AUGMENTATION CONFERENCE THE EPC AND O&M CONTRACTOR'S PERSPECTIVE 26 August 2013 Alessandra Pardini.

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Presentation on theme: "© Webber Wentzel 2013 ESKOM CSP / SOLAR AUGMENTATION CONFERENCE THE EPC AND O&M CONTRACTOR'S PERSPECTIVE 26 August 2013 Alessandra Pardini."— Presentation transcript:

1 © Webber Wentzel 2013 ESKOM CSP / SOLAR AUGMENTATION CONFERENCE THE EPC AND O&M CONTRACTOR'S PERSPECTIVE 26 August 2013 Alessandra Pardini

2 GLOBAL CSP CSP around the World

3 GLOBAL CSP Global CSP up to January 2013 (figures include ISCC and ISCoal) o Total installed CSP: 2553 MW o Total installed CSP (2012): MW % of total o Total installed CSP prior to 2006: 354 MW o Total installed CSP ( ): 2199 MW o Total installed CSP in USA: 506 MW % of total o Total installed CSP in USA (2012): 0 MW o Total installed CSP in Spain: 1954 MW % of total o Total installed CSP in Spain 2012: MW % of total (source: CSP World) 3

4 GLOBAL CSP Projects: Largest single operational project (parabolic trough): o 100 MW Shams 1 in Abu Dabi o Companies: Abengoa Solar, Masdar and Total o EPC: Abener, Abengoa, Teyma o O&M: Abengoa Solar Largest single operational project (central receiver): o 29 MW Coalinga in California: Chevron o Company: Chevron o Project developer: BrightSource Energy 4

5 Largest under construction: o 377 MW (central receiver) Ivanpah SEGS in Primm, California o Companies: BrightSource Energy, Google, NRG Energy o EPC: Bechtel Engineering o O&M: NRG Energy Largest CSP facility: o Total of 354 MW SEGS - Solar Energy Generating System (parabolic trough) o Consisting of 9 individual plants in 3 locations o Installed capacity of 14 MW (SEGS I) up to 80 MW (SEGS VIII and IX) o Developer: Luz Industries (now BrightSource Energy) o Current owners: Cogentrix (SEGS I and II), NextEra Energy Resources (SEGS III – IX) 5

6 SOUTH AFRICA CSP locally

7 CSP IN SOUTH AFRICA Background on REIPP o Integrated Resources Plan for Electricity 2010 – 2030 (IRP 2010) recognises the need for new generation capacity to ensure the continued uninterrupted supply of electricity to South Africa. o Pursuant to this, the Department of Energy issued the First Determination, on 1 August This allocated 3725 MW to be procured, spread across various forms of renewable energy. The Second Determination, on 12 December 2012, allocated a further 3200 MW across these technologies. o The allocated amounts broadly align with the capacity allocated in terms of IRP (Integrated Resources Plan) o The Renewable Energy Independent Power Production procurement programme gives effect to the First and Second Determinations (REIPP). The REIPP programme is run by the Department of Energy, and the energy generated is purchased by Eskom. 7

8 CSP IN SOUTH AFRICA Background continued… o The REIPP RFP contemplates that renewable energy will be procured in a series of "Bid Windows". For each window, competitive Bids are submitted and Preferred Bidders are appointed thereafter. o So far, Rounds 1 and 2 have been concluded, with most Round 1 projects under construction, and Round 2 projects in the late developmental stages. o In terms of the First and Second Determinations, CSP was allocated 200 MW, followed by 400 MW, respectively. 150 MW of CSP was awarded in Round 1, with a further 50 MW awarded in Round 2. 8

9 CSP IN SOUTH AFRICA Projects in South Africa - Operational demonstration and pilot plants BBEnergy Liner Fresnel demo plant: 0.08 MW o Operation start date: November 2010 BBEnergy Eskom Fresnel pilot plant: 0.15 MW o Operation start date: January

10 CSP IN SOUTH AFRICA Under construction: o Kaxu Solar One: 100 MW parabolic trough (1 st REIPP Bid Window) Developer: Abengoa, IDC EPC: Abener, Teyma O&M: Abengoa Solar 10

11 CSP IN SOUTH AFRICA Under construction o Khi Solar One: 50 MW central receiver (1 st REIPP Bid Window) Developer: Abengoa, IDC EPC: Abener, Teyma O&M: Abengoa Solar 11

12 CSP IN SOUTH AFRICA Under construction (as of August 2013) o Bokpoort: 50 MW parabolic trough (2 nd REIPP Bid Window) Developer: Acwa Power International EPC: Acciona Energia, SENER, TSK O&M: Nomac, Investment in Africa Energy Services 12

13 CSP IN SOUTH AFRICA Planned: o Eskom CSP Plant: 100 MW central receiver (Webber Wentzel) Finance: World Bank, Clean Technology Fund, African Development Bank, Agence Française de Develop Engineering and Project Management: Tractebel Engineering (GDF- Suez), Astrom Technical Advisors, PD Naidoo & Associates 13 (source:

14 CSP IN SOUTH AFRICA REIPP Round 3: o For Round 3, 200 MW allocated to CSP. o Webber Wentzel has been involved in one CSP project in Round 3 - Abengoa 100 MW CSP. o Another likely Round 3 project - Mestimatala 50 MW CLFR (Linear Fresnel) is "Ready for Bidding" (source: amplesolar.com) o GDF-Suez has also submitted a CSP bid for Round 3 14

15 CSP IN SOUTH AFRICA CSP Plants in South Africa (map data source: AfriGIS (Pty) Ltd) 15 Blue Blue operational Yellow Yellow construction Green Green development / planned Bokpoort is also now under construction

16 EPC CONTRACTORS REIPP and EPC

17 EPC CONTRACTORS IN REIPP? The EPC Contractors in REIPP are typically international firms. The international firms that have been involved in South Africa in the CSP sphere thus far are: o GDF-Suez S.A. - French multinational electric utility company, headquartered in Paris which operates in the fields of electricity generation and distribution, natural gas and renewable energy: involved in the Eskom CSP Project via Tractebel Engineering. 17

18 EPC CONTRACTORS IN REIPP? o Abengoa - Spanish multinational corporation, which includes companies in the domains of energy, telecommunications, transportation, and the environment; Abengoa Solar, a subsidiary, is focussed on design, financing and construction / operation of PV and CSP projects: Involved in the Khi and Kaxu CSP projects locally, and construction of the operational Shams 1 (100 MW) parabolic trough plant, discussed above. Involved in EPC for the first commercial central receiver (solar power tower) CSP plant, PS10 Solar Power Plant (11 MW) in Seville, Spain in o Acciona Energia - Spanish company based in Madrid, subsidiary of Acciona, involved in developing renewable energy projects, including small hydro, biomass, solar energy and thermal energy, and the marketing of biofuels. o Involved in several Round 2 projects - Bokpoort (50 MW CSP). 18

19 KEY ISSUES – EPC (REIPP) Key issues for EPC Contractors in terms of REIPP Delay damages  Should be be capped? Conservative approach of SA banks has required this to be capped at 15 % Performance damages  Similarly capped at 15 % Defects liability  With 24 months being acceptable, banks have requested d / p's (independent of warranties) to be 5 years Limitation of liability  100 % Exclusion from limitation of liability  Confidentiality  Corrupt Acts  Economic Development Obligations  Indemnities (IP)  Third party liability Performance bond  10 – 20 % Advance payment  Very common for cash flow requirements Retention  Takes the form of a warranty bond for the defects liability period Direct agreements with lenders  Required by SA banks, with additional warranties, step-in rights and subordination provisions Pass through obligations (PPA, IA) and equivalent project relief  These have been contentiously debated 19

20 O&M CONTRACTORS O&M and REIPP

21 KEY ISSUES – O&M (REIPP) Key issues for O&M Contractors in terms of REIPP Performance damages  For availability in certain circumstances Limitation of liability  200 % Exclusion from limitation of liability  Confidentiality  Corrupt Acts  Economic Development Obligations  Indemnities (IP)  Third party liability Performance bond  100 % to 150 % Direct agreements with lenders  Yes Pass through obligations (PPA, IA) and equivalent project relief  These have been contentiously debated 21

22 WEBBER WENTZEL Alessandra Pardini / THANK YOU

23 JOHANNESBURGCAPE TOWN 10, 16 & 18 Fricker Road,15 th Floor, Convention Tower Illovo Boulevard,Heerengracht, Foreshore Johannesburg, 2196, South AfricaCape Town, 8001, South Africa T T Legal Notice: these materials are for training purposes only and do not constitute legal or other professional advice


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