Cape Town – South Africa’s abundance of sun and wind means the country has the potential to supply cheaper and cleaner energy. This is according to an analysis conducted by Mainstream Renewable Power, a global wind and solar company.
Mainstream’s chief executive, Dr Eddie O’Connor, said the initial analysis strongly underpins government’s investment in renewable energy.
“Not only are wind and solar power cheaper than new fossil fuel generation in South Africa but when combined, they can make a very significant contribution to the baseload power at the time of day it is most needed. The analysis also shows that the combined wind and solar resources match the average demand profile for electricity.”
O’Connor said this was significant because the wind blows and the sun shines when electricity is most needed, which did not occur regularly in other global markets.
Mainstream measured wind and solar resource data from 2013 for 18 solar sites across South Africa at different times of the day. The sites analysed represented a combined generation capacity of 42 000 megawatts, 30 000 MW wind and 12 000 MW solar. Mainstream then examined Eskom’s electricity demand data (for 2008) to understand the impact the 42GW of wind and solar generation could have in relation to meeting the country’s electricity needs.
O’Connor said analysts have indicated the average bid price for wind projects in the Renewable Energy Independent Power Producer Procurement Programme.
Round one bids were accepted at 115c/kWh (kilowatt hour), round two at 100c/kWh and round three at 74c/kWh. By the time round four was reached in August last year, the bid price had dropped to 62c/kWh. The same process caused solar power to bid down from 275c/kWh in round one to 79c/kWh in round four, compared to the predicted cost of 128c/kWh for electricity from Medupi, which is designed to supply 4 764MW of renewable energy capacity in less than four years.
“Wind and solar power are quietly been piling on capacity in South Africa. The fact that these projects have almost surpassed the output of such a station in about half the time of its still-unfinished construction is hard to ignore.”
Rezco Asset Management director Rob Spanjaard said: “In the fog of confusion caused by the chaos at Eskom, sight is lost of where the national government has done really well in the area of power generation.
“Perhaps this could provide a model to get out of the morass that we are in that is dragging the whole economy down.”
Spanjaard said the state-run renewable energy programme was a leader internationally in a field of power generation and costs for renewable energy compare very favourably to the costs of a coal power and the final costs of nuclear power were forecast to be more expensive than coal.
“These renewable energy projects are very profitable to the bidders, so there are increasing numbers of groups bidding for the projects available. At last round, only 20 percent of bidding projects were selected.”
He said in the process the country received an unbelievable bargain, currently, 5 200MW had been approved at a capital cost of R168-billion. The project winners had to supply all their own capital and about 40 percent of the spend was local content and thousands of jobs have been created.
“The lessons have nothing to do with privatisation or even renewable energy. At the very least the government should analyse what has worked so spectacularly well for them in one area of power generation and apply these lessons to Eskom.”
Johan van der Berg, chief executive of the South African Wind Energy Association, said wind energy costs South Africa almost nothing. And added to this was the savings from not using coal and diesel.
“These benefits have increased significantly in the last six months, over the previous period. If we assume South Africa will be electricity constrained until 2020, it is fair to assume that an expansion of the renewable energy procurement programme will yield enhanced benefits. Just in wind energy, the community benefits over the next 20 years.”
Manie de Waal, divisional head of Sola PV at Energy Partners said renewable energy was the alternative energy source to what Eskom supplies through the grid.
“As such, it can generate cost savings as well as provide reliability during the current erratic supply South Africa experience through load shedding.”
He said the local manufacturing and installation of solar photo-voltaic (PV) units could create more than 2 000 jobs over the next three to five years.