South Africa’s energy mix is expected to shift considerably towards renewables over the next two decades.
This is according to Eskom chairperson Dr Baldwin Ngubane, presenting the company’s financial results for the year ended 31 March.
The power utility’s revenue rose 10.6% to R163.4 billion (2015: R147.7 billion), and net profit for the year was R4.6 billion (March 2015: R200 million). All financial ratios showed an upturn due to improved operating results, as well as the conversion to equity of the subordinated government loan and equity injection of R23 billion.
However, Ngubane’s statement this week is contrary to what Eskom CEO Brian Molefe recently said, when he criticised renewables as having “failed” the power utility by not providing the necessary power to avoid load-shedding at the right time of day.
According to Ngubane, although coal will remain a core part of the country’s energy mix for the foreseeable future, SA will have to diversify towards lower carbon-emitting energy sources under its agreements at the United Nations COP 21 climate change conference in 2015.
Dr Tobias Bischof-Niemz, who heads up the CSIR’s Energy Centre, says the first renewables came into the South African power system at exactly the right time – when the power system was highly constrained.
From January to June 2015, wind power created a net cash benefit of R300 million for Eskom, saving more in expensive diesel fuel than what Eskom had to spend for the wind energy, says Bischof-Niemz. In the same time period, he adds, solar photovoltaic (PV) and wind either delayed, minimised or avoided load-shedding entirely.
“Over the full year 2015, solar PV and wind reduced the number of hours with more than 30GW total demand from 1 500 down to 700, hence freeing up much-needed maintenance space for Eskom’s fleet during 800 hours out of 8 760 hours in a year.”
He points out SA is in a transition towards a more sustainable energy system. “As the Energy Centre of the CSIR, we are conducting applied research on all energy-related questions that this transition poses.
“The biggest challenge so far is to convey the message that inexpensive but variable solar PV and wind, mixed with flexible but more expensive power generators, can supply the customer demand in the same reliable manner as a coal fleet, and can do so cost-competitively.”
Bischof-Niemz says today, renewables provide a higher share of electricity than fossil fuels in a number of countries such as Spain and Denmark.
“After a decade of heavy subsidies for renewables, which triggered technological improvements and mass manufacturing, solar PV and wind are now fully cost competitive to alternative new-build options in a number of countries, including SA.”
He explains this cost-competitiveness has accelerated the global deployment of renewables such that in terms of new capacity and investments, renewables are the fastest growing category of new power generators globally. “It is very likely that South Africa will follow this path, too.”
Johan van den Berg, CEO of the South African Wind Energy Association, says in order for the country to increase renewable energy use, government must continue speedily with the Renewable Energy Independent Power Producer Procurement Programme (REIPPP).
Nonetheless, he points out there were many regulatory barriers and erroneous perceptions about green energy that have now “largely disappeared”.
Moeketsi Thobela, CEO of the South African Photovoltaic Industry Association, says renewable energy has been critical in on-time and on-budget project delivery. For example, he says, 960MW of solar PV capacity was added within one year, between end-2013 and end-2014, as part of the REIPPPP.
“It also reduced Eskom’s diesel costs and mitigated load-shedding, especially in summer – during Eskom’s traditional coal-fleet maintenance ‘window’ period, when difference in demand between peak and standard periods is low.”
Meanwhile, environmental activist group Greenpeace says a renewable energy pathway and biodiversity protection is crucial to poverty alleviation in Africa.
Greenpeace International new executive director, Bunny McDiarmid, visited the Greenpeace Africa office in Johannesburg this week to show solidarity and gain further insight into the key issues. The visit was McDiarmid’s first to the continent since taking office in April.
“What I heard is achieving 100% renewable energy by 2050 is absolutely possible in Africa. However, it will require a shift in understanding that renewable energy is already a viable solution but it needs to be backed by the policy-makers,” notes McDiarmid.