Renewable energy: A rising star

Renewable energy (RE) in South Africa is a complex issue with many roleplayers, complicated by confusing acronyms. Gareth Griffiths investigates.

Gouda Wind Power facility
Seen from Riebeeck West, the BW2 Gouda Wind Power facility supplies 138 MW and makes for an interesting landscape blend with agriculture.
Image by: Gareth Griffiths Imaging

Back in the 90’s, when greenhouse gases and load shedding were myths, solar or wind power was something done by off-grid farmers.

By the 2000s, world consciousness flared about the environment and fossil fuel usage, promoting a significant swing to renewable energy.

For example, wind power. The UK started heavy investment in wind power resources as far back as the year 2003, beginning with an offshore facility in Liverpool Bay. Today they have an onshore and offshore installed capacity of 22 Gigawatts, planned double by the year 2030.

In the eyes of many informed South Africans, the regulation of the RE industry seems complex with multiple roleplayers involved. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was begun in  2011 by government. Now in its fourth bid window (BW) phase, the REIPP allows for the independent supply of a specified number of megawatts of electricity by commercial bidders. Unfortunately, one of the key roleplayers remains Eskom, which continues to have the monopoly over the supply of electricity to South African users. This remains a stumbling block for the free entry to trade for independent power producers (IPPs) who are not free to trade their power with consumers in an open market. Instead, they have to supply their power into the Eskom owned and operated grid, another effective state monopoly at a regulated price.

A significant step forward has come in the publishing of the South African Cabinet’s approved Integrated Resources Plan (IRP) 2019.  The IRP maps out South Africa’s energy mix for the next 10 years and sees our overall electricity production capacity rising significantly by 2030. Among many other things, it spells out a role for renewable energy in our power mix. Energy analysts will point out that the current IRP has been a slow boiled egg, much to the chagrin of the supply chain in the renewables sector, some of whom were forced to close shop.

The IPPP Office, a specialised REIPPP interdepartmental government unit, reported in mid 2019, that wind contributes 52% of SA RE supply. There were 36 preferred independent wind power producers with a collective capacity of 3.6 Gigawatts.  Since some RW4 projects are still under construction, there is an installed capacity of 2 Gigawatts with 900 individual wind turbines countrywide. 

The climate change impact of onshore and offshore wind power generation.

Project Drawdown has placed wind power generation as the second most impactful measure the world could take to reverse the growth of the greenhouse gases in the planet’s atmosphere by the year 2050. This is not a glib statement, but science-based research done by some of the most brilliant minds in the world recruited into the Drawdown Fellowship. All it would take would be to install onshore wind turbines from a level of 2.9% of the global grid to 21.6% by 2050. Putting it into numbers, such a project would permanently remove 84.6 gigatons of reduced carbon dioxide from the business as usual trajectory at a cost of $1.23 trillion to the world, resulting in a saving of $7.4 trillion by displacing other more expensive methods of generation, including fossil fuels. Drawdown envisages a plausible scenario of  1 051 gigatons of CO2 drawn down off the business as usual scenario, which would be a combination of at least 80 different activities. And wind turbines would contribute 8% towards a global drawdown goal, where the upward trajectory of carbon-equivalent gas into the atmosphere would reverse. Additionally, the universal adoption of offshore wind power should move its share of the global energy mix to just 4% (2016 figure at 0.1% only) to draw down another 14.1 gigatons of carbon by 2050. 

[Reference: Drawdown, the most comprehensive plan ever proposed to reverse global warming – Book edited by Paul Hawken, 2017]

We contacted the South Africa Wind Energy Association (SAWEA) for comment. SAWEA welcomed the IRP announcement of 2019 and Ramaphosa’s related comments in his 2020 SONA address. They say the recently finalised Integrated Resource Plan (IRP) 2019 commits to 14.4 GW of new wind power capacity by the end of 2030. This should constitute 18% of SA’s generation capacity.

Ramaphosa announced that a Section 34 Ministerial Determination would be published soon to give effect to the Integrated Resource Plan 2019 (IRP 2019), which has large wind and solar photovoltaic allocations to 2030. The REIPPPP Bid Window 5 would also be initiated.

“The 14.4 GW of new generation capacity from wind energy by 2030 will have positive spin-offs for the country’s economy as this capacity is expected to attract more than R300 billion in investments, create jobs across the industry value chain and deliver cheap electricity to consumers,” says SAWEA CEO, Ntombifuthi Ntuli.

According to SAWEA, the value of R300 billion excludes specific investments that will be attracted by the local value change, such as manufacturing, transportation and logistics investment. These investments will flow into a number of sectors including construction, manufacturing, and transportation and warehousing as well as finance and professional services. The BBBEE impact of these investments will also be substantial.

Did you know?

Our wind power sector has attracted over R80.6billion investment with BBBEE equity shareholding increasing with each round. On average, SA in total owns over 50% equity in all IPPs while black citizens own, on average, 33% of project equity.

Ntombifuthi Ntuli
Ntombifuthi Ntuli
Image by: SAWEA (Supplied)

“We are happy (with wind share of the new IRP mix), as we transition to a clean energy future.  With the bulk of the increase coming from renewable sources, it is a promising sign for our country as it faces pressure to reduce its carbon emissions and provide cheaper power,” comments Ntuli.

But wind power, despite its size in the SA RE mix, is not the only ace in the South African renewables pack. By mid-2019, 6.4 Gigawatts of RE was licenced from a total of 112 different IPPs. Of this, 45% comes solar: photovoltaic PV panels, most commonly called solar panels and the larger concentrated solar power (CSP). CSP plants generate solar power by using mirrors or lenses to concentrate a large area of sunlight onto a receiver, creating heat, to produce good old fashioned steam.

Recently, the South African Photovoltaic Industry Association urged the Department of Minerals and Energy and Nersa to finalise changes to Schedule 2 of the Electricity Regulation Act so as to expedite self-generation projects. This would be to loosen the grip that Eskom has on the direct supply chain. 

We spoke to Dom Wills, CEO of the SOLA Group, one of the downstream operators in the PV value chain. The SOLA Group specialises in microgrid systems across the continent. They were successful participants in the REIPPP BW1,3 and4.

“The key to this vision is that the grid becomes independently operated.  An independent grid operator can run an energy market on a willing buyer willing seller basis.  This market can have a spot price for energy sales, but there could also be futures, derivative products, etc.  A completely open market will allow economics to dominate and multiple sellers of energy to enter the market.  This is a robust solution, as there are multiple companies who provide energy to the country instead of relying on one which is the case currently.”

“In our view, renewable power will dominate generation in Africa, and worldwide in the next 15 years.  Africa, has a great opportunity in Solar, receiving 40% of all the sun’s energy. As storage technology improves, the grid penetration of renewables will grow hugely by 2050,” he concludes.

Author

Leave a Reply

Your email address will not be published. Required fields are marked *