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Green power steams ahead

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 11 Jun 2015
Government's renewables programme has procured more than 6 327MW under four bidding rounds.
Government's renewables programme has procured more than 6 327MW under four bidding rounds.

As Eskom continues to battle to keep the lights on, the private sector is spending R170 billion to deliver 15 times as much power as Eskom through green energy.

In the past two-and-a-half years, the private sector has invested about R170 billion in renewable energy and there are about 50 different green projects on the go, says energy expert Chris Yelland. These projects, he says, make Eskom's two renewable energy developments pale into insignificance.

Yelland adds these private projects, which will deliver 15 times as much as Eskom's green plans, have mostly been financed by the private sector through loans. He says Eskom's green projects are just "public relations".

The most recent private sector project is a R5.8 billion wind-generation deal that government awarded to a consortium led by Mainstream Renewable Power, an Ireland-based renewable energy developer. That tender will see another 250MW added to the national grid.

The wind-generation project falls under the fourth round of the Department of Energy's Renewable Energy Independent Power Producer Procurement Programme. This process is made up of "rounds" in which a 20-year power purchase agreement is awarded to the developer with the most competitive bid.

According to the Industrial Development Corporation, its Green Industries strategic business unit financed 22 renewable energy projects at a cost of R13.5 billion over the first three rounds of the government's renewable energy procurement programme.

On time

Yelland notes the private sector's investment compares with the R150 billion Eskom will spend on each of its two coal-fired power stations. Eskom aims to add just under 10 000MW to the grid through its much-delayed Medupi and Kusili power plants.

These two plants, which Yelland says have been "severely delayed", will only come online around 2020 and 2021. South Africa's power system is still mostly coal-driven, as this provides 87.4% of net domestic electricity production. Wind and solar power last year provided about 2.2 terawatt-hours (TWh) out of 234TWh in total.

The private sector's projects are coming online on a "regular basis", says Yelland. Although small - at around 100MW each - in combination these developments are coming in on time and on budget, he adds.

Yelland says, however, the green projects have experienced delays because they are battling to get onto Eskom's grid. "The solution for our energy future is the private sector and renewable energy. All the capacity coming on stream at the moment is due to the private sector."

Getting cheaper

Lucy Baker, a research fellow in international relations at the University of Sussex's Energy Group, notes the private sector investment is the result of the state's four-year-old renewable energy programme. She adds tariffs offered by the most recent renewable energy projects are now well below those that will come from Eskom's future coal plants.

Baker notes SA's renewable energy industry is emerging in the midst of the country's worst electricity supply crisis in 40 years. This has resulted in soaring tariffs and a downgrading of national power utility Eskom to junk status.

By June 2015, the renewables programme had procured more than 6 327MW under the four bidding rounds, says Baker. Of this, 53% came from wind, 36% from solar photovoltaic, and 10% was sourced from concentrated solar power, she says.

Baker says another 6 300MW is likely to be added to the grid on top of the 37 projects that have already added 1 827MW to SA's power supply.

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