Chinese firm to build SA solar plants

2010-08-26 14:53

Hong Kong - Suntech Power Holdings, China's largest maker of solar panels, said on Thursday that it has signed a deal to develop solar plants in South Africa with up to 100 megawatts in capacity as the country looks to boost clean energy output.

The signing of the memorandum of understanding, which coincided with the visit by President Jacob Zuma to China, was one of a dozen deals involving investments in energy, power transmission and railways between the two nations.

Zuma has urged China to invest more in infrastructure and manufacturing in his country, as his government seeks to broaden South Africa's economic appeal beyond mines and resources.

Analysts say total investment for building a 100MW solar power plant could be between $350m and $400m.

"This (deal) highlights that there are so many markets that are completely off the radar screen for people who follow the sector, South Africa being one of them," said CLSA analyst Charles Yonts. "It's good for Suntech most definitely."

Suntech sells solar equipment to Australia, Germany, Japan, Peru, Spain, Thailand, the United Arab Emirates and the United States.

The deal also highlights China's desire to export its infrastructure and building expertise, with Beijing offering cheap loans to countries that agree to let Chinese companies build power plants, roads and telecommunications networks.

Renewable push

Suntech's non-binding memorandum of understanding had no financial terms, Rory Macpherson, director of investor relations said. He declined to name the South African companies in the project.

"We're exploring development of solar projects with an unnamed solar firm," Macpherson said, declining give a timetable for the investments.

"Obviously, we are committed to developing the solar market in South Africa. We will look for solar opportunities as soon as possible," he said, adding that the total size of the photovoltaic market in South Africa could be more than $1bn.

Suntech's agreement is the latest among Chinese renewable energy companies looking to enter South Africa.

China Longyuan Power Group Corp, the nation's biggest wind power producer, has said it is setting up wind projects in South Africa, according to media reports.

Longyuan was not immediately available for comment.

Those deals included a €240m loan agreement between South Africa's third-largest mobile phone operator, Cell C, and China Development Bank, and a memorandum of understanding signed between South Africa's Standard Bank Group and China Railway Group to cooperate on funding for rail and infrastructure projects in Africa.

  • Jualette - 2010-08-26 15:06

    To the layman, how much is 100 megawatts. will it be enough for a City?

  • Djofs - 2010-08-26 15:32

    A city like Bloem for example needs 300MW. A 100MW in the total sceme of things is but a drop in the already dry ocean. Nice try though!!!!!!

  • rob - 2010-08-26 15:33

    This is completely irrelevant. Eskom has installed capacity of around 40,000 MW, with another 9600MW in progress (Medupi and Kusile). 100MW is so small I cannot see how it even makes headlines. Furthermore, the cost of solar generation is MUCH higher than existing plants, which will just raise electricity prices further if more are developed. As a nominal amount, 100MW is also just a token for renewable energy, rather than any kind of strategy.

  • CHERYL - 2010-08-26 15:38

    I wonder who will receive the kickbacks for all the transactions.

  • Dave - 2010-08-26 15:38

    Why are we not building it ourselves? are we really CHina's bitch?

  • Wolfgang - 2010-08-26 15:38

    Is this for real? And what technology will be used?

  • FRIKKIE - 2010-08-26 15:39


  • Dre - 2010-08-26 15:45

    The unnamed SA solar firm can't be named because it hasn't been created yet. IT won't have any solar capabilities but will have directors with surnames like Zuma and Gupta.

  • Deacon - 2010-08-26 15:49

    According to Wikipedia: "The average annual electrical energy consumption of a household in the United States is about 8,900 kilowatt-hours, equivalent to a steady power consumption of about 1 kW for an entire year." One megawatt is equal to one million watts, so for one instant, one megawatt can power 1000 homes. So 100 MW could supply 100 000 homes. Roughly and depending on consumption.

  • Grant - 2010-08-26 15:51

    Better get your renewables guys going fast...

  • Haylsmac - 2010-08-26 16:29

    The problem is that these Chinese companies come and invest, but they don't build any local capacity, use local resources or train any of the local people. So when they leave, they leave the South African market without any new skills. The South Africa government should be encouraging it's own private sector to invest in Infrastructure and it's own banks like the DBSA, Standard Bank and the IFC to support local African and South African companies.

  • Doug@Jualette - 2010-08-26 16:52

    100 megawatts would not be near enough for a city. A kilowatt (or more correctly, 'kilowatt-hour') is 1000 watts used in an hour - what Eskom calls a unit. A 3-bar electric heater would use about 3 kilowatts an hour. Your home probably uses several hundred kilowatts (units), maybe over a thousand, per month. A megawatt is a million watts - or enough for a thousand or so homes per month. But industry uses much more power than homes. A diesel-electric train generates about 5 - 6 megawatts, so a 100 megawatt solar power supply would run about 20 trains. Hope this helps.

  • LW - 2010-08-26 18:32

    Instead of building a solar power plant, a better option would be for China to invest in building a solar panel manufacturing plant. That way, more jobs will be created and will boost the local economy.

  • Paul - 2010-08-26 19:11

    Like they say everyone bit helps but conventional solar only helps in the day but there are plants that store heat in super heated salt...

  • Deon - 2010-08-26 21:01

    100MW is just a drop, but with no other day-to-day running costs, it must be cheaper... Dont we have the knowledge to build it here???

  • Pitjop - 2010-08-27 10:57

    In SA solar radiation conditions a 100MW PV plant will produce about 178 400 Mw/H per year, So now go work out how many houses this can supply, but remember PV is not good for big plants because it is to expensive and only produces on sunny days. The heat of the panels also reduces the efficiency, so that is why PV works in Europe, but will not work on large scale is Africa. Thermal Solar is the answer. China want to come and dictate our future. This needs to be stopped.

  • Slingshot - 2010-08-27 14:50

    100MW is a drop in the ocean. Renewable energy has to start somewhere, so stop shooting it down. I agee that SA companies should get on board and get the finance and build the capacity in renewable energy as we are fortunate in having plenty of sunlight. Good solar cells even generate steady power when it is overcaste

  • luvo - 2010-09-29 10:19

    my only concern is that we are allowing the chinese to build us these solar plants. How long should we rely on other people for our own problems. I would love to see SA in the nedt 50 years. Why dont we rather send our own people to go and acquire the necessary skill instead.

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