A large-scale hybrid solar and battery project, underpinned by a landmark 25-year private power purchase agreement (PPA) with Sasol and Air Liquide, has achieved financial close and is targeting to enter into commercial operation in 2028.

The Naos-1 hybrid solar and battery project is under construction at a site near Viljoenskroon, in the Free State.

It is being built by the SOLA Group, which did not disclose the project cost, saying only that the project is considered to be the largest wheeling project by value in South Africa.

The South African independent power producer developed and designed the project and will also implement and operate what is described as the largest privately contracted hybrid renewable energy project to reach financial close in South Africa to date.

Naos-1 will comprise a 300 MW (435 MWp) solar PV facility coupled with 855 MWh (660 MWh contracted to Sasol and Air Liquide) of lithium-ion battery energy storage, with the wheeled electricity to be purchased at “competitive tariffs” by Sasol and Air Liquide.

The PPA terms were not disclosed, but SOLA MD commercial Jonathan Skeen told Engineering News that the tariff was well below prevailing Eskom rates, and highly competitive relative to tariffs from new wind projects but with higher certainty of contracted energy volumes and timing.

"The project also achieves much higher buyer savings than a standalone PV-only project of the same size," he said. 

The project, SOLA added, was the country’s first utility-scale solar PV and battery energy storage project purpose-built for wheeling to private end-users across the grid.

“Naos-1 represents a major step forward for dispatchable renewable energy in South Africa’s private power market, and is the result of our intensive and innovative collaboration with Sasol and Air Liquide over several months”, SOLA MD commercial Jonathan Skeen added.

"The project delivers energy during peak periods at substantially lower rates than Eskom peak rates. Beyond this, it is able to adapt as peak demand periods shift, while also providing flexibility to adapt to shifts in buyer demand."

Sasol executive VP Dr Sarushen Pillay reported that the project formed part of the group’s broader transformation strategy towards a low-carbon energy portfolio. And Air Liquide CEO for Africa, Middle East and India Nicolas Poirot said the hybrid solution set a new benchmark for reliable, firm renewable energy at scale.

Financial close was achieved following a multi-lender project finance process involving South Africa’s major commercial banks including the Development Bank of Southern Africa as the largest senior debt financier, alongside Nedbank, RMB, Investec and Absa.

The 100% South African and 51% black-owned project is majority owned by SOLA, alongside Ubuzwe, with equity financing provided by RMB and Sanlam, while engineering, procurement and construction will be carried out by SOLA Build and WBHO.

SOLA Assets MD Katherine Persson said that reaching financial close on schedule for a project of such scale, novelty, and complexity, and following accelerated PPA negotiations, demonstrated SOLA’s unrivalled record in delivering clean energy for its partners on time and to budget.

The company indicated that it had a further 600 MW of hybrid solar and battery projects at a highly mature development stage, and Skeen reported that SOLA had a target of achieving 2 GW of solar power and 5 GWh of storage by 2030.