The renewable energy sector could drive economic development in South Africa and could possibly compete internationally in future, London-based merchant bank NextEnergy Capital CEO Stefano Sommadossi told Engineering News Online on Tuesday.
“The country has the making of a renewable energy sector − wind, sun, technology and capability and has enormous potential to develop and compete on a global scale,” he said at the Solar South Africa Conference, held in Johannesburg.
“South Africa can create an industry around the tariff mechanism, provided it specialises in key issues and key sectors, for example by generating energy, on or off grid, from the mining sector. South Africa has the potential to become a net exporter of energy for not only Africa, but worldwide.”
Economic growth depended on the speed at which power could become available. “For example, in 2010, the renewable energy installed in Italy was equivalent to the power of about ten nuclear energy plants, which would take about 15 years to construct. What is key is the availability of power in the very short term to trigger economic development,” Sommadossi said.
Attracting investment from abroad, and using existing local capital in large-scale projects could also trigger technical innovation, he said.
“South Africa could trigger of the next wave of opportunity in specialising in technologies, which could spin off into creating employment opportunities, and providing the base on which it could export its knowledge specialising in the application of technologies.”
Meanwhile, attracting the right type of capital and guaranteeing the quality of returns were also key for local and international investors. Sommadossi also suggested that South Africa should look to, for example, existing capital such as pension funds, to provide returns to local investors.
The quality of development of the country’s renewable energy sector was also critical, and required a balance of power generation capacity, grid development and technical efficiency, he concludes.