Renewable energy takes a R28bn step forward


AMID growing concerns that South Africa’s economy will be further hamstrung by another round of Eskom load-shedding, government and the private sector are quietly taking the next step in the country’s renewable energy journey.

The second bid window for the procurement of 1 043.9MW of renewable energy capacity from independent power producers reached financial close yesterday. It clears the way for the construction of seven new wind farms and nine solar energy projects worth a collective R28bn and will be a step toward alleviating the country’s energy shortage.

The National Energy Regulator of South Africa (Nersa) estimates that the 2008 load-shedding cost the country around R50bn.

In parallel, last week the Department of Energy issued bid documents for the third-bid-window Request for Proposals (RFPs), which is expected to close in August.

Second round financial closure comes as, in the last fortnight, SA’s peak energy demand was around 31 228MW, perilously close to Eskom’s capacity of 31 708MW. Reserve margins – the amount of excess capacity in an electric system – should, by international norms, be in the region of 15%. SA, by contrast, had a reserve margin of less than 1% this week.

The renewable energy programme takes the country a little closer to achieving the objectives laid out in the Department of Energy’s Integrated Resource Plan (IRP) of 2010.  It aims to transform SA’s energy mix from the current dependence on coal fired electricity to a situation where just 14% of the country’s energy will come from coal by 2030.

 Renewable energy carriers including hydro will account for 6.1%, wind for 19.7%, photovoltaic solar power for 19.7% and concentrated solar power for 2.4%. More controversially it also plans for 22.6% from nuclear energy. 

The balance is from open-cycle and closed-cycle gas turbines.

While the debate on a review of the IRP – or rather the lack of a review – hots up, the energy shortage is being aggravated by a variety of factors including delays on the Medupi and Kusile sites and increased energy consumption in winter.

It may be small in the scheme of things, but over the next 36 months, more than 2 500MW of green energy will be added to the grid, says Peter Venn, MD of Windlab Developments. 

“The advantage of most renewable energy projects is that they are much faster to construct than fossil-fired facilities,” he says.