Wednesday, March 30, 2011

R5bn solar plant in pipeline for Group Five

March 30 2011
By Wendell Roelf - Business Report

Group Five might construct a R5 billion solar power plant to supply mines, with first power seen two years from now, the construction firm said yesterday.

Greg Heale, the group’s director of engineering and construction, said the project was still in development.

“We hope to be producing power in 2013 when it starts to come on line.” He added that the targets applied “if the project goes ahead”.

Group Five, South Africa’s fourth-largest construction firm, expected to conclude all contractual arrangements, including off-take agreements, with mining companies within the next six months.

Heale did not wish to name the mining firms.

The project, to be located in the sun-drenched Northern Cape, would see construction of a 150 megawatt first phase, although the plant could be upgraded to between 450MW and 500MW of power.

The economy is moving away from an over-reliance on dirty coal power, which supplies 90 percent of local electricity needs, to cleaner energy sources such as solar, wind and nuclear energy.

South Africa could produce its first solar power from a proposed $21 billion (R144bn) solar park by 2012, eventually supplying 5 000MW.

The country wants to accelerate its renewable energy plan to meet a target of producing 10 000 gigawatt hours by 2013.

Last month Group Five said diluted headline earnings a share for the six months to December fell 21 percent to R1.98, compared with R2.49 in the same period a year earlier.

The group said its total secured construction order book stood at R9.3bn, little changed from the end of June.

The construction industry is struggling to find new projects, as both the government and the private sector hold back on spending. The industry is also the target of sweeping investigations into bid-rigging by the Competition Commission.

Shares in Group Five rose 0.8 percent to close at R26.51.