This was the conclusion reached by the panellists at the second of the Shell Energy Dialogues last Thursday.
The discussion was chaired by CNBC Africa presenter Lerato Mbele and included Wendy Poulton from Eskom; Richard Worthington from the World Wide Fund; Professor Johann Görgens from the University of Stellenbosch; Stuart Fredman from Clean Energy Solutions; and Barry Bredenkamp from the Central Energy Fund. The theme of the evening was “Alternative Energy: Pipeline or Pipedream?”
South Africa has pledged itself to the target of 4% renewable energy by 2013, but the question is whether the country will be able to achieve this goal, given the monopolisation of coal-based power producer Eskom in the local energy market.
“The only way we’re going to achieve a just transition to a sustainable electricity supply is to maximise the role of renewable energy,” said Worthington. “The future will be predominantly and eventually entirely in renewable energy.”
But, warned Bredenkamp, the responsibility for the transformation to renewable energy is not solely the government’s responsibility: “You and me as individuals also have a role to play. There’s a lot of alternative energy that we can use in our own homes.”
South Africa has massive renewable energy potential, with its many hours of sunshine and wind. Developers are keen to get started, but the problem is getting it to the people.
“Who is the developer going to sell [energy] to? You have to be able to transmit it across the national grid,” said Fredman. “Give us access to the national grid and we’ll achieve the energy targets and bring the levelised cost of energy down over the next 10 years.”
Part of the problem of getting people and industry to use alternative energy is the cost.
Fredman explained: “The cost is slightly higher over the short term than [coal-fired power stations] … but as we look over 10, 15, 20 years, the cost comes down to be level with coal, and then significantly lower.”
A factor in renewable energy’s favour has been the recent global economic crisis and the rising costs of oil and other energy.
Görgens said: “The renewable energy debate in the last five years has really picked up momentum because of global economic changes. Economics will always play a very strong role.”
People must look at the long-term benefits instead of the initial cost, added Worthington. “A compact fluorescent lamp will save you a lot of money over its life cycle.
“Don’t look at the cent-for-cent comparison per kilowatt hour for alternative energy as opposed to coal; rather look at the cost of not having energy. What is it going to cost the economy if we don’t do something quickly and run out of coal-fired power?”
Fredman proposed a solution: “We pay two cents an hour for some form of carbon tax and it’s been sitting in the Treasury … At the moment it has a quantum value of about R8-billion. So the money is there to start a reasonably large roll-out of renewables.”
It is important for South Africa to start implementing renewable energy technology as soon as possible, said Bredenkamp. “South Africa is one component of a large globe … Most countries are accelerating their update of alternative energy. These technologies have to be manufactured and the longer we wait, the further behind we get in the queue.”
“We have a very energy-intensive economy,” said Poulton. “We not only have to change our carbon systems, we also need to look at the energy beyond our economy and become more energy efficient.”