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Rethinking Energy Supply In South Africa – Power-Gen 2016

09-02-2016 10:43 AM CET | Energy & Environment

Press release from: Phelan Energy Group

During South African Public Enterprise Minister Lynne Brown’s address at the POWER-GEN & DistribuTECH Africa conference held at the Sandton Convention Centre in Johannesburg in June 2016, she focused her attention on the current difficulties faced in keeping the country powered. As part of her speech, she highlighted the long-term need for the Integrated Resource Plan for Electricity which would see 9.2GW of electricity being generated by wind, 8.4GW from photovoltaic sources (solar panels) and 1.2GW from concentrated solar power by 2030.

We need to make a call for greater focus on renewable energy sources that will enhance opportunities within the Green Economy and, ultimately, help to boost economic growth in South Africa.

South African Wind Energy Association Chief Executive Johan van den Berg, said that “wind power is now 40% cheaper than new Eskom coal power and cheaper even than the average price Eskom is selling power at from its predominantly old and amortised fleet of coal plant”.

The renewable energy developers involved in the Renewable Energy Independent Power Producer Procurement (REIPPP) Programme have funded their facilities largely through independently sourced international investors and local banks, making these projects viable in the SA market. About R47bn of the programmes awarded bidder status reached financial close in the first round and R28bn in the second round of the REIPPP Programme.

As an example of this, the amount invested in the Solar Capital De Aar project totaled almost R5 billion to date. While this involved considerable startup costs, the company has budgeted for a five-year payback term.

The solar farm further employed over 2,000 local people at peak, and will now produce enough electricity to power approximately 75 000 South African homes every year.

Earlier this year the Department of Energy (DoE) sent out an Expression of Interest (EoI) for the establishment of one or more solar parks in the Northern Cape. Each farm is to generate between 400MW to 700MW of PV renewable energy. The EoI stated that there should be a primary focus on the industrialization of the Northern Cape by the establishment of industries manufacturing components linked to solar energy generation in the province. The construction of such large farms and the introduction of a manufacturing component, would introduce much needed long-terms jobs to the Northern Cape.

During her presentation, however, Minister Brown said that the electricity grid “in the areas that are optimal for wind and solar energy production are becoming increasingly constrained”. She explained that this could negatively impact economic growth in the medium term, as electricity prices are determined by market forces and would result in signification increases in the price of electricity.

South Africa has some of the highest irradiation levels in the world. It is important that we make use of the natural energy afforded us and enhance green energy production as far as possible in the country. South Africa is well positioned to deliver safe, green and affordable energy to its people through remaining focused on the upscaling of the REIPPP Programme.

About Solar Capital

Solar Capital (Pty) Ltd is a subsidiary of Phelan Holdings (Pty) Ltd a prominent South African based International Investment and Development Company, with the vision to become a market leader in the production of solar energy in Southern Africa. Based in Cape Town, Solar Capital has built up a local and international proficiency in renewable energy, in order to realize its mission. With Southern Africa having some of the highest annual solar radiation levels in the world, Solar Capital has invested in real estate and technology with the potential to develop the continent’s most valuable energy source – the sun.

47 Main Road,
Green Point,
Cape Town,
South Africa,
8005
Paschal Phelan
Tel: +27 (0) 21 433 0366
www.solarcapital.co.za
www.phelanenergygroup.com

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