Address by the Minister of Energy, at the second annual Wind Energy Seminar, Midrand (28/09/2010)

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Source: The Department of Energy
Title: SA: Peters: Address by the Minister of Energy, at the second annual Wind Energy Seminar, Midrand

Programme Director;
Honourable Ambassador of Denmark to South Africa, Mr. Dan Fredesirksen;
Members of the Diplomatic Corps amongst us;
Captains of Industry; and
Distinguished Guests.

Good Morning
Programme Director, I am greatly privileged to be part of this momentous occasion. The Department, with the support of the Global Environmental Facility (GEF) through the United Nations Development Programme (UNDP) and in co-operation with the Royal Danish Embassy and German Government, has successfully implemented the South African Wind Energy Programme (SAWEP). We are deeply indebted to all these institutions for partnering with us to deliver such quality outputs as witnessed under this programme. Thank you.
The objective of SAWEP, which has been running over two and half years now in the Department, is to address barriers impeding large scale deployment of wind energy technology in South Africa. Last year we met at the Sheraton Hotel in Pretoria and mainly addressed ourselves to large players in the wind energy space. It is through the success of this first seminar that a number of participants asked to turn that experience into an annual event. I am very pleased to see that you have all heeded that call and now the Wind Energy Seminar is indeed becoming an annual event.
I am particularly pleased with the theme of our 2nd Annual Wind Energy Seminar “Wind Power for Local Economic Development: South Africa Leading the Way” and trust that it will help underline the importance of considering local economic development impacts as we move to upscale wind energy contribution to the energy supply mix.
We recognise and acknowledge that renewable energy has the potential of contributing immensely to energy supply security. Diversification of energy sources, expanding access to energy services and contributing to sustainable development through the optimum use of cleaner energy resources is critical especially in this era. We all know that even the leading economies globally are taking this path. Underlying these initiatives is our quest to ensure energy security for our beloved country and her citizens – young and old, rich and poor as well as rural and urban.
Energy security has far reaching impacts in terms of the general economy of the country, as well as the quality of life of our people. Within the electricity sector, ensuring energy security means increasing and sustaining electricity generation capacity through a diverse portfolio of conventional fossil fuels and renewable energy sources. This principle is reaffirmed on the Integrated Resource Plan (IRP) 2010 which is a mechanism by which key electricity system, sustainability and government policy requirements are met. The IRP answers three critical questions around the electrical requirements for South Africa, when this capacity requirement should be met and what will be an appropriate technology mix? Many of you have provided us with inputs into the development of this important policy document and I have no doubt that renewable energy stakeholders have taken this process seriously to argue convincingly for a bigger share of renewables in future. Typically, renewable energy sources bring along favourable attributes of being non-depletable and distributed generously across the length and breadth of our country. No region and no one has monopoly over these sources.
Ladies and gentleman, I want to underline this point, this seminar is fittingly titled “Wind Power for Local Economic Development: South Africa Leading the Way” because it brings to the fore an often neglected area, that of approaching the development of renewable energy sources from an angle of equity, socio-economic development and the creation of decent jobs. Yes, with the development of wind farms, it is possible to incorporate and utilise wind technology in much needed community-based local economic development initiatives.
Wind is one of the many resources that our country is endowed with. We also have Solar, Biomass and Hydro which can be exploited easily to support industries and provide access to modern energy services for our people. However, we still have an enormous task of developing these sources to their full potential, and this is the task I have no doubt we are going to achieve within the Department during my tenure.
At this point I must indicate that the 2003 White Paper on Renewable Energy which set a 4% target of renewable energy contribution to total energy consumption is currently being reviewed and I am confident that the medium and long term targets will be more ambitious taking into account global advances made in both technology development and finance to allow a significant contribution from both solar and wind technologies. My department is ready to deploy both technology options on a large scale hence our ongoing investigations into the development of a wind industrial strategy for South Africa which was discussed with many of you by my officials at a recent workshop held on 08 September 2010 at DBSA in Midrand and the establishment of a 5000 MW Solar Park.
In 2006, Government committed itself to a target of a minimum of 30% participation by the private sector in our electricity generation industry. This commitment was born out of the realisation that it is critical for Independent Power Producers (IPPs) to complement electricity generated by our national utility, Eskom, in order to enable us to achieve the goal of ensuring energy security. We have however noted with serious concerns that investment by the private sector has not happened at the magnitude that was originally envisaged.
As Government we are continuously evaluating our policies and are working tirelessly to create an environment that is conducive for IPPs to enter the electricity market and provide the much needed power to complement and boost up Eskom’s capacity. At the beginning of the year, the President of the Republic of South Africa, His Excellency Jacob Zuma, established an Inter-Ministerial Committee (IMC) on Energy to finalize policy decisions on this particular matter and I am delighted that work has progressed well in this regard and we are in the process of reporting back to Cabinet on our proposals.
The Department of Energy is in the process of facilitating the establishment of an Independent System and Market Operator (ISMO) in order to facilitate the procurement of power from IPPs. The ISMO is intended to level the playing field and eliminate conflict of interest between the buyer and the seller of electricity in a manner that protects all players from potential market abuse. Facilitating access to a generation license, Renewable Energy Feed in Tariff (REFIT), the Power Purchase Agreements (PPA) are essential elements of a conducive and open market for Independent Power Producers (IPPs), and for this reason, the department is working closely with other key government institutions such as the National Energy Regulator, Eskom and the National Treasury to ensure that these processes are streamlined.
Programme Director let me come back to the issue at hand, the 2nd Annual Wind Seminar. On this, I wish to highlight two important elements, first, the issue of partnerships and their usefulness in transferring skills. Secondly the importance of access to quality data. Information, as you will know is important for informing any decision. On this, I am reminded of the Clean Energy Ministerial which took place on 19-20 July 2010 in Washington D.C. This event grew out of the Major Economies Forum on Energy and Climate (MEF) Leaders decision to launch the Global Partnership to drive transformational low carbon and climate friendly technologies and other dialogues among many countries interested in fast tracking deployment of clean energy technologies.
At this Clean Energy Ministerial, we announced the development of a “multilateral solar and wind working group to promote accelerated deployment of solar and wind technologies”. The initial focus of this group is on developing a Global Atlas for Solar and Wind Energy and a corresponding Long Term Strategy on Joint Capacity Building. As South Africa we were part of this decision and we therefore have to pull our efforts and work together with other partners in this initiative to realise the achievement of these objectives. The MEF made the following observation when the argument for developing a global Atlas was discussed, I quote: “the challenge is that especially in developing countries many of the relevant data simply do not exist and need to be collected or generated from scratch”. I am glad that South Africa through this initiative is leading the way and is therefore putting developing countries on the global map. I am delighted that today we are here to discuss an issue that demonstrates progress in terms of the development of the South African Wind Atlas.
Motivations advanced for developing the wind atlas are the same almost everywhere. I will mention only a few. For example, we have been sensitised to the fact that currently available data does not facilitate decision making because it is mainly available at a low spatial resolution yet detailed regional assessments require higher resolutions. Further, the data often comes at a low temporal resolution and represent monthly and annual averages yet insolation and wind conditions vary at lower time scales, resulting in fluctuating electricity generation. Analysing these fluctuations in greater depth requires data with higher temporal resolutions to enable investors or project developers to take the variability in electricity generation adequately into account.
Given the above complexities, and our commitment to developing wind energy at a large scale, the Department of Energy is currently updating the South African Wind Atlas. Programme Director, let me take this opportunity to reiterate that the successful deployment of wind technology depends to a large extent on the accurate knowledge pertaining to the practical exploitable wind energy potential. This information is critical especially for investment planning, and updating the wind atlas is an important step towards closing this gap.
Honourable guests, it is befitting to extend our deepest gratitude to the international community for their support through the South African Wind Energy Programme. I am particularly grateful to the Danish Government for the overwhelming technical and financial support received through the Embassy in support of the wind atlas initiative. I am mostly encouraged by the fact that Denmark, along with Germany and Spain are leading the multilateral working group I referred to earlier, therefore the knowledge that South Africa is about to share with the world is destined to meet international quality standards.
It is also encouraging to see many countries coming together to provide official development assistance and I believe that working together we can be able to accelerate the deployment of clean energy technologies. Let me also extend our appreciation to the collaborative effort of the leading institutions involved in the development of the South African Wind Atlas, these are South African National Energy Research Institute, Council for Scientific and Industrial Research, RISO Technical University of Denmark, University of Cape Town and the South African Weather Service. I am confident that partnerships established to complete this enormous project have enabled the all important transfer of skills. As you all know, capacity building and know how transfer are crucial for enabling a scale up of renewable energy.
Ladies and Gentlemen, the Wind Atlas project is a four year project covering areas of the Northern, Western and Eastern Cape. It consists of five working packages that together will culminate into a wind atlas and database. It is my privilege today to launch wind measurement work package which consists of ten wind measurement stations installed over the project area. The wind measurement plays an essential role in verifying and fine tuning of the models. The ten wind measurement stations are in operation and the measured wind data can graphically be viewed on www.wasa.csir.co.za and can be downloaded monthly on http://wasadata.csir.co.za/wasa1/WASAData.
The first wind atlas and database will be published within 12 months of wind measurements. Already the data is useful for comparison and identification of potential viable wind sites. I am confident that through the leadership of SANERI and the hard work of members of the Wind Atlas project team we shall be able to see the interim results of the wind atlas by mid June 2011. This information will be available to everyone for free and it will enable project developers to easily identify hot spots for wind farm development. While we recognise that users have different needs, I believe that this information will be beneficial to all interested parties and will fill the gap that currently exists. To potential investors, we trust that this wind atlas will reduce the pre-investment costs. I am looking forward to this wind atlas being shared with the rest of the world.
I am now honoured to launch the wind atlas data display and download websites. This is the data that will be used to develop the wind atlas that I said will be available in 2011. I wish you all a fruitful day
I thank you

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