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R58bn new renewable energy projects to create 6 000 jobs

Read time 5min 20sec

The South African government has set its sights on rolling out renewable energy projects worth R58 billion from independent power producers (IPPs).

This is according to public works and infrastructure minister Patricia de Lille, who says work being done on infrastructure projects across the country have the potential to contribute significantly to job creation and government’s overall economic recovery plan.

At a virtual briefing on Monday – hosted by the minister and head of infrastructure investment in the Presidency Dr Kgosientsho Ramokgopa – De Lille said three projects from the energy sector have been gazetted, and their total investment value is R58 billion, and the potential for direct job creation is estimated at 6 000.

As an example, she said, the emergency power programme involves the development, installation and operation of a total aggregate of up to 2 000MW new generation capacity in SA from IPPs.

The renewable energy projects form part of 276 projects in SA being handled by the Public Works and Infrastructure Department's Sustainable Infrastructure Development System Methodology.

Powerful partners

The announcement by De Lille comes shortly after the renewable energy sector and other stakeholders recently met with mineral resources and energy minister Gwede Mantashe, in what is viewed as a significant step towards the sector forging a positive relationship with the Department of Mineral Resource and Energy (DMRE), based on trust and improved communications.

“This inaugural engagement is an important step towards our sector being able to constructively work alongside the DMRE to reduce obstacles to the rollout of renewable energy in our country and help clean, green energy play an essential role in government’s economic stimulus package, designed to accelerate economic recovery,” explains Ntombifuthi Ntuli, CEO of the South African Wind Energy Association (SAWEA).

According to SAWEA, Mantashe stressed the energy sector needs to act as a unit that incorporates the various renewable energy technologies, instead of technology competition.

It adds he outlined the importance of the renewable energy sector’s role in economic growth and job creation in the long-term and the need for the industry to define its role in the just and systematic energy transition.

SAWEA notes the purpose of the engagement was to establish a forum where the renewable energy sector can have a platform to engage the DMRE on a regular basis.

The meeting raised a number of interesting points that included: SA’s commitment to move towards a low carbon economy, in line with the Paris Agreement, as well as the role of energy as a significant catalyst of economic growth and recovery.

The next steps will be to finalise the Ministerial Engagement Forum that should include key stakeholders in the renewable energy sector, including industry bodies, government (led by the DMRE) and organised labour.

SAWEA hopes the engagements can be scheduled quarterly so that issues can be dealt with and not bottleneck.

“An initial key focus is to resolve matters around the REIPPPP [Renewable Energy Independent Power Producers Procurement Programme], such as new generation capacity procurement; sector contribution to resolving the energy crisis; job creation and the just energy transition; and industrialisation, among other pressing issues that will unlock growth,” Ntuli adds.

“The forum should resolve obstacles to the implementation of the IRP 2019, as well as to engage on tariff issues.”

SAWEA notes the inaugural event was wrapped up with the minister remarking that his expectations had been exceeded and he hoped it would set the tone for ongoing and regular engagements on addressing the country’s energy challenge.

In addition to renewable energy associations, participants included professional bodies, Eskom, Cosatu, Business Unity South Africa, the Black Business Council, the Association of Municipal Electricity Distributors of South Africa and the Energy Intensive Users Group.

Budget vote lauded

Meanwhile, the South African Photovoltaic Industry Association (SAPVIA) has applauded the determination put forward by Mantashe to mobilise the private sector to address the threats to energy security but cautions there is no more time to waste.

Responding to last week’s budget vote speech by the minister, it says the private sector stands ready and able to act with pace to meet the rise in demand with a secure, sustainable energy supply.

SAPVIA is a not-for-profit body which consists of active players in SA’s photovoltaic (PV) market.

“Stakeholders from across the renewables sector, and specifically solar PV, need only to be given the green light on bid window five of the REIPPPP, and they will invest and drive the infrastructure development we so desperately need,” says Niveshen Govender, COO of SAPVIA.

“Solar PV represents the least costly and fastest to commercial operation of all energy sources and will address the minister’s concerns that there is ‘insufficient time’ to bring in grid-scale generation options due to long lead times.”

According to SAPVIA, utility-scale solar PV projects (eg, 75MW) take between 18-24 months from signing the power purchase agreement to commercial operation date. This could even be achieved in 12 months given an enabling environment.

“The urgency with which the minister is treating the situation is welcomed, but this needs to be measured in actions rather than words,” adds Govender.

“SAPVIA welcomes the proposed amendments to New Generation Capacity Regulations and would urge that the clarification for requirements from municipalities when they apply for Section 34 Determinations from the department come sooner rather than later.

“As a priority, the minister must increase the current exemption from licensing from 1MW to 10MW for energy generation installations. We believe this is an arbitrary limit set as a policy decision and has no technical basis, and by raising it, private sector operators will be able to step into the gap and deliver much-needed supply quickly and with minimal upgrades to a large number of substations, or nodes on the distribution network.”

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