Support industries are expected to mushroom in South Africa as its solar industry kicks off, but CSP suppliers will vie for space in the remote boom towns of Upington and Pofadder, reports Tom Nevin in Johannesburg.
By June 2014 concentrated solar power will be a live element in South Africa’s energy fabric. To service demand from its nascent solar sectors, local support industries are expected to spring up in the host towns of Upington and Pofadder in the Northern Cape Province.
Such remote area localisation is an expected requirement if the region’s fledgling electricity generating sector growth and sustainability needs are to be met. But CSP supliers will vie for space with other manufacturing processes (mainly photovoltaic), earmarked for a $20bn Fluor-designed solar park in Upington.
The park has massive potential, is eminently do-able and could be the world’s biggest solar power localisation programme when the hosting of dozens of sun-associated factories becomes a reality.
Domestic and foreign PV cell manufacturers are reportedly queuing up for factory space in the park. Their presence will put paid to the possibility of costly import bills for solar receptors, according to the South African Alternative Energy Association.
According to the SAEA “multiple solar technologies are now favoured for the $20bn project to assist in the development of a solar industry in South Africa.
Red tape gauntlet
However, investors face a formidable obstacle course of red tape and high costs in the process.The World Bank’s IFC Doing Business 2012, reports that South Africa is ranked 44th out of 183 world economies surveyed in the “ease of doing business” category, and 8th in the African region.
The departments of finance and trade and industry are working hard to untangle the red tape threatening to snarl would-be foreign investors. Simulataneously, ruling party ANC executive council member Cyril Ramaphosa is trying to clear the minefield of high costs that faces entrepreneurs hoping to cash in on the downstream flows of enterprise produced by the solar park.
“We must reduce that expense,” he says, “including the cost of energy, communications, labour, transport and of unnecessary regulatory compliance.”
Areva bent on first-mover advantage
French multinational power conglomerate Areva, with an established presence in South Africa’s nuclear power sector, is keen to into other fields of generation, particularly solar.
Milton Venetos, Vice President of Systems Engineering at Areva Solar says it is in the developing economies that much of Areva’s innovation happens today. “The south-south phenomenon is becoming an economic factor and we’re trying to direct the company into driving innovation that targets such countries’ specific needs,” he tells CSP Today.
“We should be designing and manufacturing in Brazil, South Africa or Australia for emerging markets.” Venetos insists that these countries have the talent and the capability of producing their own design, manufacturing and engineering. “It is an exciting economic and geographic development that we want to be involved in” he adds.
He also believes that Africa presentes an opportunity to help build up the local manufacturing energy-related product capacity to access export initiatives, or third-party funding from the US and elsewhere. “We try to be smart about how we can use or leverage third-party funding”.
He says the use of US initiatives such as AGOA (African Growth and Opportunity Act) is inevitable. Similar concessional arrangements have already begun from India and China.
CSP to lead localisation
A fully operating solar park is roughly five years from taking shape. As such, the Upington development will be led by Abengoa’s 100MW parabolic concentrated solar power installation, due for commissioning in mid June 2014, around the same time as its tower CSP project is switched on at the tiny town of Pofadder 100km to the west.
Ken Robinson, senior executive at global management consultants Accenture and close to South Africa’s energy seats of power, believes concentrated solar energy is a logical option for South Africa. “Everything else is [incurring] problems. Even photovoltaic is a problem because you still have to get the raw materials and PV will be spread all over the place”.
By contrast, “CSP is a lot more efficient, more easily localised, especially in terms of development, and it is more compact and concentrated”, he explains.
“It’s exciting that the department of energy and Eskom are thinking in terms of 5,000MW of CSP. That is equivalent to a full-size coal-fired power station”, he adds.
The DET’s IRP2010 calls for 7,000MW of solar power. In Mr Robinson’s opinion, this should comprise 5,000MW of concentrated solar power. “The CSP component should be as big as it possibly can be. We don’t have much wind here in South Africa, but we have a lot of sun.”
In its current form, the plan only commits to an initial 1,000MW of CSP. However, the department has the flexibility to adjust volumes as circumstances change over the 20-year run of the programme.
Thirst technology, dry location
Mr Robinson tells CSP Today that he sees water scarcity in the region as a problem, particularly in view of the fact that the projects’ localisation will grow the small host towns to more than double their current size.
“We have plenty of sunlight in the Northern Cape,” he observes. “Unfortunately, we don’t have much water there, and we’d need water to clean and for the thousand or so households that will emerge.”
The Orange River, South Africa’s biggest watercourse, runs through or reasonably near both sites. However, it is already heavily drawn on for residential, industrial and agricultural uses. “That will have to be watched,” he cautions.
What transformation awaits the remote, traditionally sleepy towns of Upington and Pofadder? The nomadic Koi-San, land grubbers, diamond prospectors and miners once cursed the sun and the 35˚ summertime heat it generated.
Today, due to an explosion of localised solar industry, the once dusty villages of Upington and Pofadder now ponder city status. From here on the sun will be likely be viewed in a more kindly light altogether.