City of Cape Town to buy solar power from an Office park
Category Power Supply
The Black River Park, an office park in Cape Town with tenants including Sunglass Hut, Gijima and Brandhouse, has completed an expansion of its solar photovoltaic (PV) power generation facilities and will be selling its surplus power to the City of Cape Town. Small, renewable energy projects in SA are starting to supplement the limited coal-fired power available from Eskom and the municipalities. About 1,000MW is expected to be delivered from renewable sources such as wind and power by the end of this year. The 74,000m2 Black River Park in Observatory is owned by Black River Investments, whose shareholders are Leaf Capital and Joubert Rabie. It has a number of other facilities that appeal to environmentally aware tenants, many of whom are international groups, including a car-pooling network and a reverse osmosis plant for landscaping irrigation. The office park has been generating 700kW of power from the first phase of its solar PV installation since August 2013 and has now added another 500kW to bring capacity to 1.2MW. Black River Park spokesman PJ Rabie said the total cost of the solar PV installation was about R20m. Sola Future Energy MD Chris Haw said the plant supplied about 25%-30% of the office park’s total energy needs. The City of Cape Town has approved the project to supply energy to its distribution network and a buy-back rate of 49.72c/kilowatt hour has been proposed, which is close to the rate at which the city buys power from Eskom. This is less than the office park pays the municipality for electricity, but the solar PV project’s viability does not depend solely on selling its surplus power to the city. It is financially attractive because the office park pays a dual rate for its electricity, with an energy and a demand component that adds up to a rate of about R1,10/kWh. The period when solar PV power is generated coincides with the peak demand period when airconditioners are running. “The viability of the project is a combination of the energy being saved and sold to the city and reducing peak demand,” Dr Haw said. The main reason municipalities do not encourage more electricity generation is that they depend on the revenue from electricity sales. But the academic director of the Sustainability Institute in Stellenbosch, Mark Swilling, said municipalities were realising that the small amount of revenue lost from allowing solar generation would be more than offset by increased economic activity, as businesses could be more efficient and the location would attract more businesses.
Author: SA Commercial Property News
