Govt woos investors in renewable energy



Upington – Investors are this week deliberating on a feasibility study into the creation of a mega solar park in Upington, where government envisages that some 5 000 MW of renewable energy could be produced. 

Energy Minister Dipuo Peters on Thursday described the ambitious project as “a milestone moment” towards renewable energy in South Africa. It could see the development of a solar energy park that would not only help government meet its emissions reduction targets, but attract massive investment opportunities for the country.

Some within the energy sector say the venture could also place the country as a leading supplier of various solar solutions and products, leading to more foreign investment and job creation. Currently, the Department of Energy is putting the figure at 15 300 jobs.

South Africa has committed to a 34 percent reduction of carbon emissions by 2020. The diversification of energy sources could boost the country’s image as among the first to embrace a green economy, considering that the country will host the next round of climate talks – COP 17 – next year.

Such interventions could also safeguard South Africans against the looming threats of load shedding owing to the country’s deteriorating reserve margins.

Initial estimates put the costs of the solar park to around R150 billion to be spilt between government and the private sector.

Peters told investors at a two-day conference underway in Upington that government was ready to put its money “where [its] mouth is” and called on them to do the same.

BuaNews has learned that about R1.8 billion from the R26 billion World Bank loan granted to power utility, Eskom, earlier this year, would go towards the park’s establishment. Peters emphasised that for the project to get off the ground, it would require massive private sector funding and contribution by independent power producers (IPPs).

The conference itself is being used as a feasibility study to gauge the interest of investors towards the solar park initiative.

Upington, which is centrally located in the sunny Northern Cape, is seen as a perfect site for the solar park, mainly due to the area’s high radiation and vast land.

Peters said a decision was taken at Cabinet level to invest more in renewable energy sources as South Africa prepares to mark a radical departure from conventional energy, such as coal-generated electricity, to nuclear.

The new economic growth path for South Africa also sees a possible 300 000 jobs being created in the green economy by 2020, with 80 000 in the manufacturing sector.

“We believe that both principles of energy security and diversification can only be possible if we bring on board [IPPs] to contribute to the energy balance… Working together with other committed South Africans… we can achieve an appropriate electricity balance that is economically, socially and environmental sound,” Peters said.

She warned though that only those investors who have demonstrated capacity for local component manufacturer would be afforded first opportunity.

“We want to work with those international players who believe in the future of this country and the continent and we don’t want to see planes suddenly coming in with products from somewhere [else].”

South Africa is not the only country doing research on the viability of solar energy, with countries like India and Brazil doing the same.

However, a presentation by Khara Hais Municipality manager, Willem Engelbrecht, at the conference made the investors aware of the risks associated with the project, considering that the province has a huge shortage of grid and needs about R1.6 billion to design a new 400 KV line of transmission.

Both the provincial and national government have committed to step in to address the issue of grid shortage, which was so far the only major challenge to have emerged in the feasibility study carried out in association with the Clinton Climate Initiative.

Research shows that by 2020, the cost of solar power should be less expensive than it is today due to emerging opportunities to cut costs through engineering improvements.

Solar energy is seen as the most cost-effective way to satisfy the huge energy needs currently facing the world. It is also regarded as a clean alternative to fossil fuels and nuclear power. – BuaNews

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