Solar energy received a boost on Monday, when Energy Minister Tina Joemat-Pettersson announced a new power procurement project in the Northern Cape to deliver 1 500 MW of solar energy.
The additional procurement was a Department of Energy legacy project to mark the SA International Renewable Energy Conference taking place in Cape Town this week.
“It is a ministerial legacy project to ensure we remember this conference,” the minister told media after her opening address on Monday.
The announcement is the first step in a process that will seek bids from independent power producers (IPPs) and will likely only feed into the grid between 2019 and 2020.
Renewable energy is gaining steam both in South Africa and globally and SA’s IPP programme has been heralded as a success story.
With a target of 5 000 MW of solar energy and 5 000 MW of wind energy by 2030 in place, the IPP office has successfully attracted much-needed investment in the renewable energy sector.
In April, the minister approved 13 new renewable IPP bids, which means there will now be 79 IPP projects with 5 243 MW being added to a national grid desperately in need of power.
“To date, more than 6 000 MWh of electricity had been procured from 37 renewable-energy IPPs,” said Joemat-Pettersson.
“To date, renewable energy projects in South Africa have resulted in 20 000 jobs for South Africans and attracted R192.6bn in investment,” she said.
IPP office for Africa
Joemat-Pettersson said the IPP office mandate will come to an end in this month and will be reshaped to grow its level of influence in South African and in the broader continent.
“The IPP office is a success story that we would like to duplicate in other countries,” she said. “The reshaping of the office has started in earnest and will have a larger mandate.
“We would like to invite businesses and stakeholders to comment on what it is they appreciated in the office and what we could do better,” she said. “The success story is because we pulled together a sound group of skills, which allowed us to work effectively and efficiently to meet time frames.
“Policy certainty around the programme and integration with other demands has allowed the programme to be sustainable,” she said. “We must build on the success of this innovation, but look at transferring skills and technologies.”
South Africa’s Department of Energy has unveiled plans to expand its procurement of renewable energy by a further 6300MW.
The capacity will form a new round under the Renewable Energy Independent Power Producer Procurement Programme, results for the fourth round of which have just been revealed.
In the past it has been implied that wind power will receive approximately half the allocated capacity.
South African Wind Energy Association chief executive Johan van den Berg said: “By this logic, we’re looking at perhaps an additional 2500MW to 3000MW of wind power and a procurement process that extends another three to four years.
“This, once gazetted, should give comfort to international investors to invest in local factories that can push the local content of wind farms to about 54% with the upper 60s in reach.”
Successful wind energy bidders in the fourth round were Biotherm Energy at the 117MW Golden Valley in Eastern Cape, Building Energy at the 140MW Roggeveld in Northern Cape and Enel Green Power at the 140MW Kurusa in Northern Cape and the 139MW Nxuba and 140MW Oyster Bay in Eastern Cape.
Global Wind Energy Council secretary general Steve Sawyer said: “The wind resource is excellent, the country large and the need for energy acute. We see South Africa as a strong growth market for the medium and long-term.”
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The Renewable Energy Independent Power Producers Programme has started delivering financial benefits to the South African power sector and the economy on the whole, a recent study has shown.
A study by the Council for Scientific and Industrial Research (CSIR) states that the 1.6 GW of wind and solar power capacity commissioned by the end of 2014 helped save more than $450 million. With the payments to these renewable energy projects through feed-in tariffs at around $390 million the net ‘profit’ to the economy from these project is over $60 million.
Electricity generated from 0.6 GW wind energy projects and 1 GW solar power projects replaced 1.07 TWh electricity from diesel-fired power plants and 1.12 TWh electricity from coal-fired power plants. Renewable energy projects have thus offset more than 2 million tonnes of CO2e emissions in 2014.
Under the Renewable Energy Independent Power Producers Programme (REIPPP) South Africa plans to source 10 TWh electricity from renewable energy projects based on a wide variety of technologies. Generation of this quantum of electricity would be generated from 3,725 MW capacity. The government plans to auction this capacity through competitive bidding.
1.85 GW of onshore wind energy capacity, and 1.45 GW of solar photovoltaic (PV) power capacity will be auctioned by the end of the programme. Other renewable energy technologies include concentrated solar thermal, biomass, biogas, small hydro, and landfill gas.
The net financial saving of over $60 million is an excellent advertisement for the South African renewable energy sector which may see a further boost once the government introduces the carbon tax policy. Companies that would be required to reduce greenhouse gas emissions under the carbon tax policy would be able to fulfil their obligations by generating offsets from renewable energy projects which, as shown by the CSIR, would bring in significant financial savings.
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Renewable energy has benefited South Africa, a study by the Council for Scientific and Industrial Research (CSIR) has found.
The independent study by the CSIR found that renewable energy from the country’s first wind and solar (photovoltaic) projects created R8 million more financial benefits for the country than they cost during 2014.
The study was conducted against the backdrop of the Department of Energy running its procurement programme to expand the generation capacity in the country. It has already procured close to 4 000 MW of renewable capacity (mainly wind and solar) from independent power producers (IPPs).
According to the chief engineer at the Integrated Energy Research Centre at the CSIR, Dr Tobias Bischof-Niemz, the study was based on actual hourly production data for the different supply categories of the power system.
“The benefits earned were two-fold. The first benefit, derived from diesel and coal fuel cost savings, is pinned at R3.7 billion. This is because 2.2 terawatt-hours of wind and solar energy replaced the electricity that would have otherwise been generated from diesel and coal.”
The second benefit of R1.6 billion is a saving to the economy derived from almost 120 hours of so-called “unserved energy” that were avoided thanks to the contribution of the wind and solar projects. During these hours the supply situation was so tight that some customers’ energy supply would have had to be curtailed (“unserved”) if it had not been for the renewables.
“Therefore, renewables contributed benefits of R5.3 billion in total (or R2.42 per kWh of renewable energy), while the tariff payments to independent power producers of the first wind and photovoltaic (PV) projects were only R4.5 billion (or R2.08 per kWh of renewable energy), leaving a net benefit of R0.8 billion,” said the CSIR.
“We’ve developed a methodology at the CSIR Energy Centre to determine whether at any given hour of the year renewables have replaced coal or diesel generators, or whether they have even prevented so-called ‘unserved energy’,” said Bischof-Niemz.
This CSIR methodology was fed with cost assumptions from publicly available sources, such as power utility Eskom’s interim financial results 2014 for coal and diesel costs, or the Department of Energy’s publications on the average tariffs of the first renewables projects, or the Integrated Resource Plan on the cost of unserved energy.
“Our study shows that in 2014, renewable energy provided a net financial benefit to the country. Without the first solar and wind projects, we would have spent significant additional amounts on diesel, and energy would have had to be “unserved” during approximately 120 additional hours in 2014,” said Bischof-Niemz.
“What is more, the cost per kWh of renewable energy for new projects is now well below R1 for solar PV and between 60c – 80c for wind projects. That will keep the net financial benefits of renewables positive, even in a future with a less constrained power system,” he added.
The CSIR is one of the leading scientific and technology research, development and implementation organisations in Africa.
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