Guest letter by Sisa Njikelana, chairperson of the South African Independent Power Producers Association (SAIPPA).
Besides biomass and wind, which date deep into human history, renewable energy has always been viewed as an alternate power source, but it was only in the 1970s that it took a formidable shape – with Africa trailing behind.
Finance and investments are amongst the vital arsenal for further rollout of renewables. The United Nations Economic Commission for Africa (UNECA) corroborates that Africa needs US$20 billion per year to achieve universal electricity access by 2030; such comprises 60% of the global demand. Unfortunately KPMG argues that the “biggest challenge in most countries of the [African] region has been the subsidised tariff structures for electricity”, which raises the risk of disincentive for new private investment.
Other latest developments, through innovative technologies (e.g. power storage, plug-and-play off-grid solutions), are viewed as additional arsenal notwithstanding their disruptive nature. At the recent African Utility Week, one expert contended that power storage has better prospects and will benefit Africa – excluding South Africa. Since Africa is power hungry it is therefore worth exploring various technologies, which are based on each country’s resources, e.g. South Africa and Zimbabwe are endowed with platinum that is essential for the hydrogen fuel cell.
Skills demand is ever increasing whilst the rate of training is lagging behind. Forbes research projects the growth of Wind Turbine Service Technicians’ occupations in the USA at 108% (from 4,400 in 2014 to 9,200 in 2024). According to SARETEC, Europe has a shortfall of about 2,500 of the same technicians and South Africa has had to import such skills.
The evolving electricity market in Africa has been characterised by policy inconsistencies, costly and painful delays, regulatory conflicts, unclear regulatory independence, and price based regulation that can be restrictive if not anchored in intensive and extensive consultation. Worth noting is that development of policy, legislation and regulation is lagging behind the rate of reforms in the power market.
Clear, consistent, transparent, and enabling regulations – whether in a highly regulated, liberalised or hybrid markets – are almost non-negotiable to attract meaningful foreign direct and/or local investments in power generation. Furthermore, the debate around whether large- or small-scale is the best route to take cannot be conclusive unless extensive studies and intensive debate or consultation takes place.
An exemplary testimony of growth in renewables, Sarah Odera’s MSc Dissertation (University of Cape Town) asserts that: “Kenya does not have any solar power generation at a utility scale. It does however have a developed solar PV market on a residential and institutional scale. The LCPDP (Least Cost Power Development Plan – like the South African IRP), 2010 estimated that there are 200,000 solar home systems installed in Kenya whilst Hansen et al, 2014 and Ondraczek, 2014 estimate the number to be 320,000 in 2010.”
Furthermore, the innovations on micro- and off-grid systems are growing; however, we need to be mindful of challenges of technology rivalry, which are not about to ebb or become overt notwithstanding their detrimental effect. At this stage, the harm by such may not be that obvious.
Despite the prospects and challenges highlighted above, the potential for energy-mixed power generation, including renewables, in Africa is enormous. McKinseys and Company claim in its 2015 report that “over the past 20 years, private capacity in sub-Saharan Africa has doubled every five years, with 50 percent of total IPP capacity added to the grid since 2009 alone.” However there is lamentation that the 6,00MW of IPP power added is insignificant compared to total need for 600 million inhabitants without electricity. The claim further extends to “project that sub-Saharan Africa will consume nearly 1,600 terawatt hours by 2040, four times what was used in 2010.”
Given this high demand and growing keenness by African governments to allow private sector participation, what is left is for the authorities to work hand-in-hand with business to ensure a more conducive environment for increased investment in renewables.
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“Africa doesn’t need Europe’s help, it needs partnership,” says David Otieno, head of the Africa-EU Energy Partnership (AEEP) Secretariat.
His statement best summarises the spirit of the Second Stakeholder Forum which brought together more than 400 participants from Europe and Africa last month – ranging from ministers and commissioners to international organisations, the private sector, academia and civil society – to discuss renewable energy investments and innovations between the two trading blocs.
Leaders from both continents applauded the progress made towards the 2020 AEEP targets. Although they agreed more time is needed, plans to extend access to modern and sustainable energy supplies to at least half of the continent’s 1.1 billion people, to increase the use of renewable energy on the continent, and to improve energy security, are still afoot.
Africa’s economy is growing currently at an average rate of 3 per cent per year and in the last decade, six of the world’s ten fastest-growing economies were in sub-Saharan Africa. Yet, the continent’s power supply is not keeping pace.
As Jacques Moulot, chief energy specialist at the African Development Bank, points out, without a steady energy supply, real economic grow on the continent is impossible. “Energy is to economy what blood is to people,” he highlighted in his speech.
So what part can European Union policies play in plugging the energy deficit?
Renewables – the solution to energy poverty?
At present, over 600 million people lack access to electricity on the continent. The situation is particularly critical in the central region where less than 10 per cent of the population in countries like South Sudan, Chad and Central African Republic have access to electricity.
As a starting point, both African and European ministers agree that renewable energy systems – such as solar, wind, biomass and geothermal power – must play a crucial role in contributing towards universal and affordable energy access. This is already happening – the Forum detailed 58 joint initiatives which support renewable energy developments on the continent with EU funding and technical assistance.
“Renewable energy resources in Africa offers opportunities to not only fulfil the region’s energy needs, but also tap into the European market, with its energy bill of 1 billion euros a day,” Dr. Elham Ibrahim, the African Union Commissioner for Infrastructure and Energy, told Equal Times.
Dr. Michael J. Saulo, of the Technical University of Mombasa, Kenya agrees: “Africa needs Europe and Europe needs Africa. Europe has the know-how and the private investment, Africa has a vast potential for renewables. All factors converge together.”
Analysts are calling on both partners to do more to attract the private sector, but a lack of policy and regulatory coherence as well as regional integration is a major obstacle to investment.
Yofi Grant, head of Databank, a Ghanaian private investment fund, agrees that “the private sector in sub-Saharan Africa is growing faster than in any other region of the world,” and yet investors are still failing to get on-board with big development projects.
“The African private sector and foreign investors must be more proactive and get involved with the development of the continent. This way, joint policies can be launched without fear of duplication,” he told Equal Times.
Top of the agenda
Between 2014 and 2020, the European Commission’s Directorate-General for International Cooperation and Development (DG DEVCO) intends to invest between 2.5 and 2.7 billion euros on energy projects in sub-Saharan Africa. “Energy access is at the top of our agenda and Africa is in the driving seat of this transition,” said DG-DEVCO’s deputy head of unit, Felice Zaccheo.
Several financial mechanisms have been designed to combine public funding with private, commercial and bank funds, managed by the African Investment Facility – a financial mechanism that combines EU grants with other resources such as development loans to foster investments which will have a positive socio-economic impact. The Electrification Financing Initative, a project that supports electrification investments in rural areas, is just one example.
The world experienced its largest increase in green, renewable energy in 2015, adding over 147 gigawatts of wind, solar and other alternative energy power to the global grid, according to the Renewables 2016 Global Status Report, released on 1 June by the Renewable Energy Policy Network for the 21st Century, or REN21.
South Africa is one of the stand-out green nations, making remarkable strides in renewable energy, says Christine Lins, the REN21 executive secretary.
According to the report, the $1-billion (about R15.6-billion today) investment in African renewable energy initiatives in 2004 increased to more than $12-billion in 2015/16, a growth of 58%, thanks in large part to projects begun in South Africa.
South Africa was the first country on the continent to produce a gigawatt from solar power, and its contribution to wind power generation had pushed Africa’s output to more than 3 gigawatts.
Global investment in renewable energy is driven, the report states, by being both cost competitive with traditional fossil fuels and a dynamic job creator in several countries, particularly in Africa.
“Renewable generation has created 60 000 jobs in Africa, and of those, half are in South Africa,” says Lins. This boost has been driven mainly by South Africa’s successful Renewable Energy Independent Power Producer Procurement Programme.
The REN21 report confirms that governments are still key in driving renewables as a legitimate power alternative.
While 173 countries are meeting renewable energy targets in 2016, with South Africa especially making up ground in utility-scale renewable generation, a challenge still remains in effectively using residential energy production.
As has become the norm in Europe and North America, households that generate their own electricity through solar or wind power are encouraged to sell electricity back to local and national utility operations.
South Africa has the infrastructure and know-how to incentivise individual power generation to help bring renewable energy to more people, in turn lessening the reliance on fossil fuels.
The boost in South Africa’s renewable energy profile, fuelled by larger and better-performing energy solutions with the full support of the government and private enterprise is “truly remarkable”, says Lins, “(particularly when) achieved at a time when fossil fuel prices were at historic lows, and renewables remained at a significant disadvantage in terms of government subsidies”.
NAIROBI — An environment expert has said Chinese know-how in renewable energy development could help generate clean and sustainable power in Africa, which is home to almost half the global population lacking access to electricity.
David Rodgers, a senior climate change specialist with the US-based foundation, Global Environment Facility, said China had made wind and solar power technologies, which used to be seen as luxuries, become affordable to the world.
“China’s approach of doing things in a big way has made the country become the leader in the world by availing affordable energy to the populations,” Rodgers said on Wednesday at the United Nations Environment Assembly in the Kenyan capital, Nairobi.
China is the world’s largest investor in renewables excluding large hydro, with its $102.9 billion in investment in 2015 representing more than one third of the global total, according to a report issued by the United Nations Environment Programme (UNEP) in late March.
The US was a distant second, with $44.1 billion(R691billion), followed by Japan ($36.2 billion) and Britain ($22.2 billion), the report shows.
The UNEP says Africa could be one of the most promising markets for renewal energy in the next decade due to its abundant solar, wind, biomass and geothermal resources.
Rodgers said Africa should harness these renewable energy resources to help it address power shortages.
“Africa must develop strong policies to enable them to adopt solar and wind power since the continent still do not have enough supply of energy.”
In this regard, he said China’s know-how in the renewable energy sector “should be transplanted into Africa.”
“China’s investment to help make distributed power a reality, coupled with support for proper policies, would be very helpful to help African countries achieve their goals for clean and sustainable power.”
Chinese companies have been supporting African countries in developing renewable energy, engaging in solar, hydro, wind and thermal projects.
Clean energy projects are part of ten major plans for China-Africa cooperation outlined by Chinese President Xi Jinping during a China-Africa forum held in Johannesburg, South Africa in early December last year. China will provide $60 billion of funding support for the plans.
People in rural areas in Africa suffer the most from power shortages. Rodgers believes renewable energy could play a role in alleviating the problem.
“It may not be necessary to build out the grid 100 percent when we now have technology, such as distributed power, solar PV, and wind that can be based in rural areas and in villages,” he said.
Cape Town – The presence of delegations from 13 of the world’s leading clean technology clusters at Africa Utility Week, which is running at the Cape Town International Conference Centre from May 17-19, was held up on Tuesday as confirmation of the Mother City’s position as a leading green economic hub.
GreenCape said in a statement on Tuesday that it was hosting its International Cleantech Network (ICN) counterparts at the event, along with international business delegations from the Netherlands, Denmark, France, Germany, Sweden, Austria, Italy, Belgium and Canada. The statement from the government-funded, industry-led initiative that supports the development of renewable energy in the province said this would reinforce the Western Cape’s position as the green economic hub of Africa.
With members in Europe, North America, Asia and Africa, the ICN is a platform for cross-regional green economic development that works with business, academia and government to create opportunities for investment in clean technologies.
“Africa Utility Week offers these ICN members and investors a unique opportunity to network with African power and water utility professionals and local service providers,” the GreenCape statement added.
It added that the visitors would meet Cape Town officials who were attending a workshop on ICN and the C40 Cities Climate Leadership Group, a network of the world’s megacities who are taking action to reduce greenhouse gas emissions, of which Cape Town is an observer city.
Greencape quoted the Western Cape’s MEC for economic opportunities, Alan Winde, as saying: “The Western Cape government has set itself the goal of becoming the greenest region in Africa.”
To achieve this, he said, the municipality was working to create a conducive environment for private sector investment into this space, adding that GreenCape and its network had been exceptional partners in this regard.
Winde said that investments of more than R17 billion had been made in renewable energy projects in the Western Cape over the past five years, creating in excess of 2 000 jobs.
“Here in the Western Cape, we are producing and selling the energy of the future, and we are proud to share our successes with you through this event [Africa Utility Week]. Building a green energy economy is not only the right thing to do. In the Western Cape, it now also makes business sense.”
In addition to the investments in renewable energy, GreenCape said, R680m of direct investments had been made in the proposed Atlantis GreenTech Special Economic Zone over the past five years.
As energy investors eagerly await announcements of the preferred bidders in the latest round of South Africa’s renewable IPP programme – the so-called expedited bid window – it is worth reflecting on the successes of the country’s Renewable Energy Power Producer’s Procurement Programme (REIPPPP) and why it has achieved what many commentators believed was an unachievable feat.
“The REIPPPP has been a resounding success, spurring not only investment into South Africa’s energy sector, but in the broader region,” says Scott Brodsky, Partner and energy lawyer at international law firm Macfarlanes, who are advising clients across Sub-Saharan Africa on all aspects of renewable and other energy projects, including project financing and bankable power purchase agreements. “The effect of load shedding on life, on businesses and the wider economies is devastating. Although South Africa is having temporary respite from load shedding, some countries in the region are experiencing 12 to 16 hours per day with no electricity. The good news is that IPPs are helping tremendously and the need for new generation has translated into significant new opportunities,” says Brodsky.
The successes of the REIPPPP have been notable; Brodsky and the Sub-Saharan Africa team of Macfarlanes have power and energy specialists based in their offices in Johannesburg and London.. They are currently advising on energy projects throughout the region, including in South Africa, Namibia, Zambia, and Mozambique.
The success story of South Africa’s renewable energy programme is impressive when one views the figures. Sandra Coetzee, Head of Strategy at the Department of Energy’s IPP Office, recently shared the Department of Energy’s latest figures at the third annual IPP conference held in Sandton.
“Launched in 2011, the REIPPP Programme is bringing about a tangible transformation to our country’s power sector and economic and physical landscape. The competitive bidding approach clearly demonstrates that renewable energy options, and specifically onshore wind and solar PV power, can already be delivered at lower costs in energy terms, than new build fossil fuel solutions,” said Coetzee.
Here are some of the facts and figures:
• The AfDB estimates that nearly 654 million Africans still have no access to energy. This signals enormous potential for energy investment on the continent.
• In 2010, the South African government adopted a plan to grow the share of renewable energy in the electricity mix from 0% to 21% over the 20-year planning horizon to 2030, simultaneously reducing the capacity share of fossil fuels in the electricity mix from 86.5% to 57%.
• The REIPPP Programme has attracted vibrant investor interest both locally and abroad. Commitments to the value of 194 billion rand have been raised, contributing to South Africa being rated by the Climate Scope Index as 3rd and 4th most attractive renewable energy investment destination among emerging markets (in 2014 and 2015 respectively).
• The annual competitive bidding process effectively leveraged rapid global renewable energy technologies and price strengths, buying cleaner and cleaner rates with every bid cycle. Consequently South African citizens are getting the benefit of renewable energy at some of the lowest tariffs in the world.
• At the end of 2015, 6376 MW of power was successfully procured from 102 IPPs in four bid rounds of the Renewable Energy Independent Power Producer’s Procurement Programme.
• This 6376 MW of power procured represents an extraordinary 92.1% of the target 6925 MW renewable energy to be operational by 2020.
• Of the 6376 MW of renewable energy procured, just over 2GW of electrical generation capacity has been connected to the national grid. This is equivalent to half of the capacity of an additional coal powered station, delivered in only a third of the time.
• This renewable energy capacity is contributed by 40 operational renewable energy plants that will be producing approximately 5.12 terawatt hours of clean energy per year, enough to supply 1.5 million average South African households with power for a year.
• South Africa’s renewable energy share of installed capacity has grown from 0% to in 5% in five short years, making it one of the fastest growing renewable energy programmes in the world.
• Onshore wind has contributed 3308 gigawatt hours to the national grid, making it the biggest wind energy producer in Africa, followed by Morocco, whose installed capacity stood at 787 MW in 2015.
• South Africa was recognised among the top 10 countries with the largest installed utility scale solar photovoltaic capacity in the world, having reached 3300 gigawatt hours by December 2015. Concentrated solar power’s contribution to the grid was 181 gigawatt hours, whilst small hydro technologies made 40 gigawatt hours.
• A study by the Council for Scientific and Industrial Research (CSIR) found that the wind and solar power capacity operational during 2015 showed an R800 million net benefit to the economy achieved during that year, followed by a further marked increase in the first 6 months of 2015, helping to save more than an additional 4 billion rand in costs to the economy.
• From programme inception to date, 7 million tons of CO2 equivalent reductions have been realised, of which 4.7 million tons alone were realised in 2014/2015. The procured renewable energy portfolio is projected to produce well over 19 terawatt hours per annum of clean energy, reducing the need for conventional fossil fuel based power supply.
• The environmental benefit of the renewable energy portfolio at full operation will displace 45 million tons of CO2 emissions per annum. Over 20 years this will amount to a total of 902 million tons, in other words, the equivalent of four full years of South Africa’s current electricity emissions at the reported 2014/2015 levels.
• The environmental significance and benefits of the renewable energy portfolio extend beyond the reduction of the country’s carbon footprint. Our current power system requires 1.4 litres of water for every kWh of energy produced. In comparison, wind and solar PV technologies require and consume hardly any water, offering a means to supply our energy needs without further burdening our scarce water resources. Beyond diversifying the supply and nature of SA’s electrical energy production, the programme is also providing a vehicle for delivering the country’s social and economic development objectives:
• The renewable energy IPPs have committed 19.2 billion rand towards social economic development initiatives in the country, with 15.2 billion thereof specifically allocated to local communities.
• Over 23 000 job year opportunities have been created to date for South African citizens; which continue to grow beyond the original expectations of project developers.
• At least 12 new industrial facilities that have been established in the country in direct response to the REIPPPP to date.
• The Programme has been called a flagship public private partnership model for South Africa and the rest of Africa by the WWF and is considered a blueprint to inform programme design in other African countries.
• The country has benefitted from an influx of foreign direct investment. The REIPPPP has attracted 53.4 billion rand in foreign investment and financing to date. Foreign equity in the REIPPPP is 35 billion rand, equivalent to 56.9 percent of the inward FDI attracted by SA during 2014.
Cape Town – The department of energy has unveiled a new green standard label, as a means for consumers to recognise clean energy measures, as the 16th annual African Utility Week and Clean Power Africa conference kicks off at the Cape Town Convention Centre.
South Africa has just officially signed the Paris Climate Change agreement and a number of key state departments are involved in ensuring the country meets its 2020 objects, with clean energy also forming an integral part of SA’s 9 point-plan for the national economic turnaround as outlined by President Jacob Zuma during the 2015 State of the Nation Address (SONA).
As a result the Department of Energy (DoE) in collaboration with the Departments of Public Works (DPW);Trade and Industry (the dti), are collaborating on a planned energy efficiency programme – of which the new South African Energy Efficiency Label and the Building Energy Savings Campaign Identity form a part.
The aim is to encourage all South Africans to use energy efficiently, including purchasing energy efficient household appliances, says the department.
“We believe that a nation knowledgeable of the benefits of energy efficiency and the dedicated activation of the appropriate behaviour by all of us will ensure that the country achieves its set energy efficiency objectives,”the DoE says.
“Energy Efficiency Building Regulations as promulgated by government in 2012 have already laid the ground for the regulatory framework by stipulating the requirements for energy usage in buildings and setting the minimum standards for energy efficiency within which all new buildings and major renovations in South Africa are required to comply.”
Minister of Tourism Derek Hanekom also recently outlined the departments of tourism’s positive prospects for the SA Tourism sector to go Green in 2016. Six of South Africa’s iconic tourism attractions will be equipped with solar powered energy sources. Recognising the environmental and cost benefits of moving towards renewable energy, the tourism department says it is supporting major destinations to install renewable energy sources as part of the Tourism Incentive Program.
The DoE says the Energy Efficiency Label will further guide and impact positively in changing behaviour towards energy efficiency measures and compel citizens to individually take the lead in whatever platforms they find themselves in.
While no specific responsible tourism or green criteria are currently in place, Tourism Grading Council of South Africa Chief Quality Assurance Office Darryl Erasmus told Traveller24 at Indaba 2016 that these factors are being considered in accordance with other partnerships as the council prepares to upgrade its criteria, after what it describes as rigorous consultation with industry (it was last upgraded in 2012).
The DoE says appliances such as air conditioners, washing machines, electric ovens, refrigerators, electric geysers, audio and video equipment, dish washers and electric lamps will now have energy efficiency labels which have been designed to meet minimum energy efficiency standards.
Having industry wide responsible measures or criteria in place across the tourism accommodation sector would also go a long way into achieving South Africa’s energy efficiency and clean energy targets, as Responsible Tourism becomes a fierce factor across the board.
At World Travel Market Africa in April, Deputy Tourism Minister Tokozile Xasa also advocated that Responsible Tourism needed to be ingrained more strongly within the industry beyond just surface engagement, as she encouraged retrofitting tourism attractions and accommodation for energy and water efficiency, as well as universal accessibility.
Facing one of the worst droughts in memory, South Africa’s leaders have doubled down on their support of the water-intensive coal industry. But clean energy advocates say the smartest move would be to back the country’s burgeoning wind and solar power sectors.
Until a ferocious drought withered crops, turned rivers to trickles, and dried up municipal drinking water supplies, one of Limpopo province’s distinctions was the ample sun and good soil that made it South Africa’s premier producer of fruits and vegetables.
Another distinction was that the province’s farmers made an informal agreement to share scarce water with coal companies developing the Waterberg Coalfield that lies beneath dry central Limpopo.
The drought, the most extreme in South Africa since the start of the 20th century, shattered the fragile equilibrium between the agricultural and coal sectors. Pitched street clashes between farmers and police, who back the coal interests, have broken out south of Musina, where Coal Africa proposes to build a $406 million mine in an area where some of the country’s most productive vegetable farms operate. The mine would consume 1 million gallons of water a day, according to company disclosures. Both the mine and neighboring irrigated farms are dependent on the Nzhelele River, which has dwindled to a shallow stream.
Higher temperatures and diminished rainfall, which many scientists attribute to climate change are wreaking havoc in two of South Africa’s largest economic sectors — agriculture and energy. Yet in the face of this growing crisis, South Africa’s leaders continue to display unyielding allegiance to the nation’s water-guzzling coal sector, whose 50-plus billion tons of coal reserves fuel 90 percent of the country’s electrical generating capacity and provide a third of its liquid fuels. Coal also generates hundreds of millions of metric tons of climate-changing carbon emissions annually that aggravate South Africa’s warming and drying.
President Jacob Zuma’s promotion of the coal sector, though, fails to recognize an emerging solution — the renewable energy initiatives that began during the previous administration of Thabo Mbeki. Today, 13 wind power plants and 31 solar generating stations are operating in South Africa and $6 billion has been invested in renewable energy installations. These projects, which do not pollute the air and use scant amounts of water, represent 75 percent of the new electrical capacity generated by South Africa this century, according to the most recent report by the South Africa Department of Energy.
Roughly 45 sizable wind and solar projects are in various stages of construction, financing, and permitting. Indeed, the country appears well on its way to reaching the national target of 6,000 new megawatts of renewable generating capacity by 2020 and 18,000 new megawatts by 2030.
During the nine-year administration of President Mbeki, who succeeded Nelson Mandela as the nation’s second black president, South Africa seemed to be preparing for an economy that discouraged carbon emissions and resource waste, and encouraged conservation. Even as Mbeki criticized global environmental summits as Western efforts to impede development in poor nations, he nevertheless encouraged elevating ecological principles to prominence in South Africa’s economic development strategy. In 2008, the year Mbeki left office, South Africa adopted a national framework for sustainable development, which called for lowering carbon emissions and water consumption.
Although the South African private sector has been steadily expanding wind and solar power, President Zuma has shown no such enthusiasm for renewable energy. The president’s last two years in office have generated fierce criticism and public protests because of his government’s faltering response to dwindling supplies of water for drinking and irrigation. Critics also have attacked his proposals for new water-consuming coal, uranium, and nuclear projects.
Activists argue that neither the coal-based energy strategy nor nuclear power are suitable for the ecological conditions and market opportunities of this century. They cite the example of the Karoo Desert south of Johannesburg, where South Africa’s uranium reserves lie. The Karoo is one of the driest landscapes on the planet, yet the first big mine proposed there would consume 1 million gallons of water a day.
“Energy is the biggest threat to South Africa’s environment — it’s a threat to our water and our economy,” said Bobby Peek, founder and director of groundWork, one of the country’s premier environmental organizations. The group is working with community organizations to stop the Colenso coal-fired plant in KwaZulu-Natal, which would siphon off millions of gallons daily from the headwaters of the Tugela River. “There’s a drought happening,” said Peek. “It’s serious. But it’s as if our government is stuck deep in the sand and doesn’t want to see what’s going on.”
Just this week, the Zuma administration announced a new program to collaborate with Iranian financiers to address water scarcity by building desalination plants in coastal cities. Critics noted that the announcement ignored the reality of the plants’ many billions of dollars in costs, or that South Africa’s credit rating is near junk status.
Some officials are acknowledging South Africa’s growing water problems.
“There are significant difficulties from this drought,” said Dhesigen Naidoo, the chief executive of the National Water Commission, a research and science agency in Pretoria. “The drought cannot be managed the way previous droughts have been managed. In previous droughts we hadn’t factored in climate change. We are convinced that this drought is not part of a normal drought cycle that we’ve had in the past. This one is quite different. So we regard this as a drought in the climate change scenario, and our planning is working around that.”
Limpopo, about the size of Louisiana, borders Zimbabwe in South Africa’s north. In the town of Lephalale, farmers and other rural residents are locked in battles to protect water supplies from new power plants, as well as from plans to expand mining in the Waterberg Coalfield.
Eskom, South Africa’s state-owned electric utility, is building one of the new coal-burning plants, the 4,800-megawatt Medupi coal-fired power station, on a stretch of dry land west of Lephalale. When its six generating units are fully operational, perhaps by the early 2020s, the plant will consume 6.9 billion gallons of water annually.
South Africa anticipated the need for a torrent of processing water for the Medupi plant by spending $1 billion to build pumping stations, water supply and storage infrastructure, and 130 miles of pipeline to tap the distant Crocodile and Mokolo rivers. But the ongoing drought is producing fresh evidence that the two rivers may not have sufficient water in the 2020s and beyond to sustain agriculture, a fast-growing population, existing industries, and a gigantic power plant now estimated to cost $16 billion to complete.
The president’s devotion to coal has prompted intensifying civic resistance, which is showing some results. The administration’s environmental approval of the proposed 1,200-megawatt Thabametsi coal-fired station, to be built near Medupi, has been suspended following a formal appeal by groundWork and Earthlife, another prominent South African environmental organization.
In April, following an appeal by Vhembe Mineral Resources Stakeholders Forum — a group of Limpopo farmers and residents — the South Africa Water Tribunal reversed a January ruling by the Department of Water Affairs and suspended COAL South Africa’s water use license to develop the Makhado mine. The ruling halted indefinitely the development of the mine.
Such defiance is not persuasive to South Africa’s president, nor to those in his administration charged with reviewing and approving Limpopo’s new mine and power plant projects. Last August, Zuma traveled to Limpopo to attend the commercial opening of the 794-megawatt Unit 6 at Medupi, the first new coal-fired generator to start in South Africa this century.
He praised the big new plant and emphasized the need to meet the country’s demand for electricity. “The energy shortage is a serious obstacle to growth,” said Zuma. “In this regard, the opening of Unit 6 is a significant achievement for the country.”
Zuma has never attended the opening of a wind or solar installation. Three months after his appearance at Medupi, Zuma delivered an address at the G20 gathering of heads of state in Turkey. In his speech, Zuma could not remember how much money is being invested to develop the first 6,000 megawatts of renewable energy in South Africa, which is 1,200 more megawatts of generating capacity than Medupi. Zuma told the G20 leaders it was $14 million. The accurate amount is $13.4 billion, or $3 billion less than the current estimated cost of completing Medupi.
South Africa has opened the continent’s first solar-powered airport in Western Cape. George Airport which serves over 600,000 passengers annually, has launched a clean energy project which, during its first phase, will contribute around 40% of the airport’s electricity needs. Once completed, the airport is expected to be totally independent of the national grid.
The operator of South Australia’s vast network says it has no concern about the growing penetration of renewable energy on its grid, and is in fact encouraging remote towns to look at high penetration renewable micro-grids to reduce costs.
South Australia is likely to source more than 50 per cent of its electricity needs from fluctuating, but highly predictable, wind and solar power this year, and the penetration will continue to grow.
Last week the Australian Energy Market Operator issued a report on the growing penetration of renewables, and the imminent departure of the last coal generator, but found no threat to energy security.
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SA Power Networks chief executive Ron Stobbe told analysts: ”We don’t see any major implications at all for our networks. We can manage generation from any source.”
Indeed, SAPN is looking to rapidly increase the share of renewable energy in parts of its grid, to increase reliability and reduce costs – both for itself and its consumers.
It says it is talking with a number of remote towns on the feasibility of high penetration renewable energy micro-grids, that might focus on wind and /or solar power, plus diesel back-up or battery storage.
SAPN says this will be a cheaper option for the network than upgrading its extended grid, and also in making repairs to lines damaged by storms and fires. And it will increase safety.
Networks in Western Australia and Queensland are also looking at high renewable penetration micro-grids for the same reasons. A recent analysis suggested using solar and storage could cost just one-tenth of the price of other proposed methods to protect against fire risk.
SAPN is also looking to trial “mid-scale” network storage to improve reliability, allow for higher renewables penetration and defer network upgrades. Ergon in Queensland says a similar strategy is cutting network costs by one third.
SAPN says it is also conducting residential battery storage trials with multiple vendors, to ascertain the value to consumers and to networks by deferring upgrades, and is creating an innovation centre to look at such technologies.