Scatec ASA, formerly Scatec Solar ASA, has had to defer the construction of its Kenhardt solar plus storage project in South Africa. The new project is supposed to deliver 540-MW.
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Satec has also had to withdraw from projects in Brazil and Ukraine due to a delay in the government approval procedure.
The Oslo-based business was given preferred bidder status for Kenhardt’s 150 MW in South Africa’s Risk Mitigation Power Procurement (RMIPP) scheme in June 2021. It is expected to be financially closed by the end of 2021.
Scatec stated on Friday that it had been notified of the RMIPP approval delay. This delay is said to push the close financial date to the end of January 2022.
The Kenhardt solar plus storage project is then scheduled to commence in the first quarter of 2022. it will contain 225 MW/1,140 MWh of battery storage.
Scatec also warned that cost inflation and supply chain issues are now hurting the renewable energy sector. The company’s projects in the backlog and pipeline are stated to experience some difficulty escaping this.
Scatec has decided not to proceed with 166 MW of projects in Brazil and Ukraine. This is due to anticipated margins and lower returns than the company’s hurdle rates. The firm expects to record a total impairment of NOK 40 million (USD 4.6 million/EUR 4 million) to NOK 50 million in development expenses linked with the projects.
Scatec will no longer be unable to reach its target of 5.9 GW in operation or under development by the end of 2021. Scatec’s backlog has decreased to 1,915 MW as a result of project cancellations in Brazil and Ukraine.
CEO Raymond Carlsen expressed his disappointment in failing to reach the 2021 growth target in a statement. He did, however, state that the company’s track record and robust pipeline will continue to generate long-term value and growth.
He also expressed the company’s commitment to Kenhardt’s solar storage project reaching completion.
Scatec is committed to having 15 GW operating or under construction by the end of 2025.
