BPC to ink 100MW solar deal by November
Mbongeni Mguni | Friday May 29, 2020 18:11
The corporation’s efforts around solar date back 14 years to agreements made with the United Nations Development Programme (UNDP) towards reducing the country’s dependence on fossil fuels.
From an initial plan to develop 200MW, the attempts have scaled down over the years to the current outstanding tender for Independent Power Producers (IPP) to develop 2 x 50MW solar capacity.
Tenders for the contract closed last September with 166 companies submitting their bids. The corporation reportedly finalised a shortlist late last year.
According to the corporation’s recently released 2019 annual report, directors expect to have identified a preferred bidder by September and sign a contract by November.
“The corporation is embracing solar photovoltaic electricity generation particularly through the incoming IPPs and will use the technology as part of an imaginative future energy mix to deliver power efficiently and cost effectively,” directors said.
“Renewable energy projects will not only enhance the volume of locally produced power, they will also assist in reducing the corporation’s and Botswana’s, carbon emissions.
“A section has been set up within our operations to facilitate the participation of IPPs in the production of renewable energy with the corporation as the off-taker.”
The BPC expects construction of the solar project to begin in July next year and the first power to be produced from August 2022.
Critics of the corporation’s plans, however, say it is unlikely the timelines set by directors will actually be met. The critics point to the stop-start nature of the solar project over the years and the fact that the BPC is likely to be gripped by other operational and financial issues this year.
“The corporation’s focus is on filling gaps in its ExCo, ensuring the Morupule B rebuilt proceeds well and stabilising cash flow in a period where the coronavirus is playing havoc with revenues,” a corporation insider told BusinessWeek.
“The solar project timelines are the official plan but there are other priorities that may get in the way.”
The BPC recorded P243 million in pretax profits for the year ended March 2019, helped by an P800 million tariff subsidy from government.
This fiscal year, government has cut this support to P500 million, but also increased the BPC’s tariffs by 22%, a figure that nearly erases the 21 thebe average tariff shortfall the corporation has been incurring for the 2019 fiscal year.
It is expected the BPC will want to run the solar project to support demand during the day when the sun is shining and also as a peaking plant when demand rises. Coal will remain the country’s baseload, a fact government acknowledges, as its target is for renewable to comprise at least 15% of the energy mix by 2021.