Western Cape gets the nod from renewable energy sector

Read time 3min 30sec
Deidré Baartman, DA Western Cape spokesperson on finance, economic opportunities and tourism.
Deidré Baartman, DA Western Cape spokesperson on finance, economic opportunities and tourism.

The Democratic Alliance (DA) in the Western Cape says the majority of battery storage from renewable energy plants in the country will be located in the province, a move that will bolster growth and innovation.

Deidré Baartman, DA Western Cape spokesperson on finance, economic opportunities and tourism, says as part of a loan agreement with the World Bank, Eskom has committed to install a number of clean energy projects in South Africa, 75% of which will be located in the province.

“This is great opportunity for the Western Cape while showcasing the style of clean and effective governance in the province under the DA. This will also drive the shift away from the ‘single buyer’ model for IPPs [independent power producers] and will promote direct purchases, wheeling and energy trading,” says Baartman.

“All this development will attract investors, produce improved potential returns, and create new business cases in the province.”

This development in the Western Cape comes as SA witnesses an upswing in renewable energy consumption, as local businesses and households seek alternative sources for affordable and uninterrupted power supply.

Baartman says the province will continue to work on creating an enabling environment for companies, homes and communities to access clean, affordable energy, and making a substantial contribution to national energy security.

Wind- and solar-powered energy systems that combine multiple sources of distributed energy, either embedded in national distribution networks or operating independently, are on the increase across the country.

These are driven by the rising electricity prices, potential power outages, awareness of the need to reduce greenhouse gas emissions, and decreasing technology costs, among other factors.

Eskom, which supplies over 90% of SA’s electricity, is in a severe financial crisis and is struggling to pay the interest on its R419 billion debt out of the revenue it generates.

In 2018, government had envisaged that by 2030, SA’s energy mix would consist of 34 000MW of coal, representing 46% of installed capacity; 11 930MW of gas, or 16% of installed capacity; 11 442MW of wind, or 15% of installed capacity; 7 958MW of photovoltaic (PV or solar); and 4 696MW of hydropower, or 6% of installed capacity, but the plans have yet to be confirmed.

According to renewable energy industry body, the South African Photovoltaic Industry Association (SAPVIA), the business case for renewables and photovoltaics (PVs) in SA is becoming more attractive.

“There is sufficient market research and information available to substantiate that more local businesses are opting for renewables and PVs, as they offer a long-term solution for SA’s energy crisis in that they provide rapidly implementable capacity to the grid to make up for shortfalls,” a SAPVIA spokesperson told ITWeb recently.

“The falling price of renewables also means they provide a compelling price point that will create pricing surpluses for Eskom, or its replacement, in future, allowing it to pay down its debt.”

Meanwhile, the under-pressure Eskom today announced it is seeking urgent court relief against the energy regulator’s tariff decision that has left the power utility with massive shortfall of almost R102 billion compared to what was applied for.

The National Energy Regulator of SA’s (NERSA’s) multi-year price determination (MYPD4) decision was made earlier this year, in terms of which tariff increases of 9.41%, 8.1% and 5.22% were allowed for the next three years to 2022, a far cry from what was sought by Eskom.

In a statement, Eskom CFO Calib Cassim said: “Eskom provided sufficient details during public hearings on the impact of the continuous shortfall between allowed revenue and efficient and prudent costs for many years and especially since the beginning of the MYPD3 period.

“The MYPD4 decision has exacerbated the situation further and raises questions about NERSA’s commitment to implementing its mandate that requires considering the balance between the impact on consumers with Eskom’s sustainability when making revenue decisions.”

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