South Africa Gas Producer Raises Dispute With Solar Project

(Bloomberg) -- South Africa’s Renergen Ltd. accused a solar power project of “unauthorized construction” in a location where the natural gas producer holds a production right, highlighting some of the challenges the country faces in its energy transition. 

Works on the Springbok Solar Project have begun in an area designated for future gas extraction “without our prior consent or a co-existence agreement,” Renergen said in a statement, without naming the developer.

SOLA Group is developing the 150-megawatt project in Virginia, Free State Province, according to the company’s website. Clients include Amazon, AB InBev and Sibanye Stillwater Ltd.  

The Springbok plant “has obtained all necessary lawful authorizations to begin construction of its facility,” the developer said in a reply to questions. “Renergen did not express any objections until several months into construction after which they issued letters requesting alteration of the layout, demanded compensation, and instructed that Springbok halt construction.”

South Africa — historically plagued by rolling blackouts as demand for electricity exceeds supply — is in the midst of moving away from dependence on coal-fired generation. The most industrialized nation on the continent is forecast to add 50 gigawatts of wind and solar stations by 2030 to replace some of the generation from the world’s dirtiest fossil fuel, according to BloombergNEF.

Renergen counts itself as contributing to the nation’s decarbonization path with production of natural gas that’s rich in helium, which is “essential in fabricating solar panels and wind turbines,” Chief Executive Officer Stefano Marani said in the statement. 

Other solar facilities and battery energy storage system facilities are planned within Renergen’s production right area, the company said.

The dispute turned into a legal battle after Renergen appealed several of Springbok’s approvals and started legal proceedings, according to SOLA. The developer subsequently challenged the gas company’s claim to helium rights, “which was applied for on the basis of a material misrepresentation by Renergen,” it said.  

(Adds comments from solar developer throughout.)

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