Leading the green revolution

Renewable energy developer BioTherm Energy is preparing to lead South Africa’s march towards renewable energy, with one wind and two solar projects in construction and more still to come.

Founded in 2003, BioTherm Energy Pty Limited was one of South Africa’s first independent power producers (IPPs). The Johannesburg-based company initially focused on developing gas and waste heat cogeneration projects, entering into private power purchase agreements (PPAs) with large corporates to take advantage of the country’s power shortages and steep tariff increases.

BioTherm really started making an impact in October 2007, when it commissioned a 4.2MW by-product methane cogeneration plant at the PetroSA refinery in Mossel Bay, Eastern Cape Province; thus becoming the first IPP to secure project finance in South Africa. In addition, this biogas project was the first in the country to register for carbon credits (CERs) successfully.

Continuing its succession of firsts, in November 2008 BioTherm received the largest renewable energy investment ever made in Africa at that point in time: US$150 million from global equity firm Denham Capital Management LP, to build and acquire a pipeline of renewable energy projects.

When the National Regulator of South Africa (NERSA) launched its renewable energy feed-in tariff (REFIT) programme, BioTherm launched its wind and solar business development platform. The company made its most significant step to becoming the key renewable energy player it is today in December 2010, when it restructured the business: discontinuing further investment in cogeneration projects to focus primarily on pursuing wind and solar projects.

Power for change

Around 14 people make up the BioTherm team, led by chief executive Jasandra Nyker. The team has more than 80 years of wind and solar development and investment experience, with more than 1,000MW developed and operational in international markets. Nyker says the company is growing, and believes its wide skillset will take it far.

“BioTherm has the unique ability to fully develop renewable energy projects in-house with experts in site development, wind and solar resource measurement and analysis, environmental impact assessments, turbine selection, carbon reduction, financing, construction and maintenance,” she remarks.

Supported by customers including Eskom (the South African electricity public utility), other private PPAs and other African utilities, BioTherm has funding in place for a pipeline of 2.0GW of wind and solar power generation projects, spread across sub-Saharan Africa. Its anchor equity investor is Denham Capital, and it has debt funding from Standard Bank, the Industrial Development Corporation and Nedbank.

The company has two legacy projects in operation today: the first is the 4.2MW biogas project in Mossel Bay previously mentioned; and the second an agricultural methane capture and destruction plant at Kanhym, Africa’s largest piggery, in Middelburg, Mpumalanga. BioTherm also developed a coal-to-biomass fuel switch at South Africa’s largest citrus estate, based in Tzaneen, Limpopo Province. This switch reduced the carbon dioxide output of the Letaba Citrus Estate’s peel-drying plants by 20,960 tonnes of CO2 per annum.

In the pipeline

The first phase of the SA Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) bidding process awarded BioTherm three projects: the Aries and Konkoonsies solar projects and the Dassiesklip wind project.

The Aries solar facility is currently under construction at a 20-hectare site, 36km southwest of Kenhardt in the Northern Cape Province; while the Konkoonsies solar project will be built 32km northeast of Pofadder. Both facilities will have 10MW capacity and comprise 43,000 photovoltaic solar modules manufactured by BYD (Shanghai) Industrial Company Limited.

The Dassiesklip wind project is being built on a 350-hectare area approximately 5km west of Caledon in the Western Cape Province. It will have a capacity of 27MW and comprise nine 3MW wind turbine generators manufactured by Sinovel. These projects have recently started construction, and are scheduled for completion in December 2013 and January 2014. BioTherm finances, manages and owns all its projects. It operates the projects through its wholly owned subsidiary BioTherm Operations and Maintenance Pty Limited.

Construction will be contracted out: the solar facilities to be built by German solar PV construction specialist Juwi Solar GmbH; and the Dassiesklip wind facility built by a consortium comprising SA firm Group Five Construction, Spanish firm Iberdrola Ingeniería Y Construccion SA and Chinese firm Sinovel Wind Group.

Ready for renewables

As the only SA company to win three renewable energy projects in round one of REIPPPP bids, BioTherm is eager to participate in round three, scheduled for August this year. At this point Africa’s renewable energy market is still comparatively small and the companies within it young, but Nyker claims renewable energy will bring great benefits to South Africa and its neighboring countries in the years to come.

“Renewable energy has enormous potential to deliver energy to meet the needs of South Africa’s growing economy, creating employment opportunities and new industries,” she says, adding that investors are aware of this too.

“The South African debt market still has appetite for renewable energy projects, although it is becoming more stringent in respect to project feasibility. In regards to the equity financing, the closure of REIPPPP round one and additional MW allocation to renewable energy has provided comfort to investors.”

The country is showing a good level of commitment to developing its renewable energy market and BioTherm, having already made good progress, is determined to be at the movement’s forefront.

“BioTherm is committed to being one of the leading South African renewable energy project developers and operators,” says Nyker, “and has a strong desire to build financially attractive projects that catalyse sustainable local economic development in the communities in which the projects are located.”