CAPE TOWN (Business LIVE) South Africa is a potential solar gold mine, according to industry analysts Frost & Sullivan (F&S), who said on Monday that solar photovoltaic’s two biggest markets, Spain and Germany, were oversaturated and floundering.
The government’s 20-year master energy plan, the Integrated Resources Plan, was finalised in March after public comment and debate, and the distinct winner for the plan was solar photovoltaic.
The plan allocated 8,400MW of solar photovoltaic to be built by 2030, rolling out 300MW a year of large-scale solar photovoltaic from 2012 onwards.
F&S pointed out that much hype surrounded the Upington Solar Park concept – a proposed 5,000MW cluster of solar farms to be developed like an industrial development zone on a corridor of available land in the Northern Cape. This region has the highest levels of solar radiation in the world, comparable only to the Atacama Desert of Chile.
“The plan was met with scepticism initially, due to the massive scope of the project, and the fact that it was not mentioned in the draft form of the Integrated Resources Plan. The new Policy Adjusted Integrated Resources Plan, however, allows for 9.4GW of solar energy, more than encompassing the Upington Solar Park concept,” F&S noted.
Currently, solar photovoltaic in South Africa is limited to off-grid usages, such as telecommunications, game farms and isolated lodges, rural applications, navigational buoys, and other such applications. But more recently, companies have been using solar photovoltaic as a marketing tool to showcase their clean energy trends, and several municipalities have been experimenting with using solar photovoltaic for road signage, street lights and billboard illumination.
“The off-grid market potential for solar photovoltaic is limited, however, and has been growing at a natural, organic rate for years, both globally and in South Africa. Globally, installed capacity of solar photovoltaic has exceeded 21GW, the majority of which is connected to the grid. The largest of these solar parks is 97MW; the Sarnia solar photovoltaic facility located in Canada takes up the land equivalent of approximately 470 soccer fields,” the analysts noted.
“The question is whether solar photovoltaic is the right choice for South Africa? Global solar photovoltaic project developers are actively in pursuit of achieving an installed cost of US$1 a watt. Although prices are decreasing rapidly, due to learning rates, technology advances and a drop in silicon prices, at about US$3.80 a watt currently, there is still a way to go,” they said.
F&S added that, to ascertain solar photovoltaic’s justification as a technology of choice in South Africa’s energy mix, several questions had to be answered. One such question was related to land availability. Comparative land usage for solar photovoltaic indicated that 1,000MW of solar photovoltaic generation would require 11,000 acres of land.
South Africa’s plan of installing 8,400MW of solar photovoltaic over the next 20 years would thus result in the allocation of 92,400 acres of land.
Luckily, large tracts of land in the Northern Cape would be available to develop. This was also an area of great solar radiation, they noted.
The plan to create an area large enough for 46,300 soccer fields would be the largest cluster of solar farms in the world to date, and would be visible from space.
F&S pointed out that the construction of these projects over the next 20 years would create a significant number of jobs.
The Spanish solar photovoltaic market created 28,000 jobs between 2001 and 2010, to account for slightly more than 3,000MW of solar photovoltaic. For the South African market, this would be far exceeded.
“8,400MW of solar photovoltaic, together with another 1,000MW of concentrated solar power technology, theoretically will provide in excess of 60,000 jobs. However, it is the spin-off aspect that is interesting. To create a cluster of solar parks in the Northern Cape will require infrastructure – roads and rail infrastructure, water, transmission grid access, and civil works construction.
“The spin-off will likely result in indirect job creation for the influx of employees, and will contribute significantly to development in the region. 9,400MW of solar (solar photovoltaic and concentrated solar power) technology could create up to 100,000 jobs,” they said.
They noted that South Africa was in a prime position to become a key global player in the solar photovoltaic market, amid rapidly decreasing prices of this technology.
“Perhaps it is better that we are slightly behind more mature markets such as Spain and Germany – we can learn from their examples.
“Currently, the policy framework in South Africa has been slow to get off the ground, frustrating industry players and investors by delaying timelines. Although the 8,400MW allocation have been decided, market players are still waiting for the final REFIT to be decided, as costs have changed since first proposed in 2009. Once the first private public partnerships are signed, however, the market will flood with activity. Although not as cheap as wind, solar photovoltaic has an advantage over other renewable technology in that it is modular, and thus relatively quick to install – approximately eight months for an 80MW facility, after permitting.
“Once the legislative policy around independent power producers and the independent systems and market operator is finalised, solar photovoltaic industry players can start the process of rolling out 300MW a year from 2012, and the solar gold rush, which has burnt through Spain and Germany as well as the deserts of California and Nevada, will head to South Africa,” they concluded.