Six years ago the government set a target that 4% of the country’s energy mix should come from renewable sources by 2013.
That target is a long way from being met. Although South Africa has the natural resources, willing producers and the right intentions from the government to use renewables, it lacks the necessary policies and frameworks, which is causing it to lag far behind the rest of the world, experts say.
In April, then-minister of minerals and energy, Buyelwa Sonjica, revised the renewable energy target to between 6% and 9% of the energy mix by 2013 and between 9% and 15% by 2018.
But critics say this is too hopeful. ‘We will not reach 4% by 2013,” says Wikus van Niekerk, director of the Centre for Renewable and Sustainable Energy Studies at the University of Stellenbosch. ‘It will be very difficult to reach even 1%.” Van Niekerk says that although he is encouraged by the minister’s renewed commitments, he hasn’t seen anything being done yet.
The excitement surrounding the topic needs to be backed by firm policies and appropriate power purchase agreements that would bring independent energy producers on to the power grid. ‘The government needs to level the playing field,” says Van Niekerk. ‘It needs to ensure that the correct procedures and policies are in place, because it has been extremely slow on that.”
The principal power consultant at consulting firm Hatch, Dieter Matzner, says that there is not a single successful independent power producer (IPP) on the grid. ‘An enabling environment for an IPP to secure a connection to the grid, has not been put into practice yet,” he says.
It’s not that there aren’t enough IPPs. ‘There are many ready to invest,” says van Niekerk. ‘The projects are quite highly developed but they can’t go ahead without policies.”
Matzner says that in the past few years IPPs have lost millions of rands after getting to the point at which they were ready to produce power, only to find that the framework is uncertain and they were unable to connect to the grid. ‘A good refit [renewable energy feed-in tariff] is nice, but what’s the point if there is no ability to connect to the grid and secure a power purchase agreement?” he asks.
Eskom has developed three programmes to procure power from the private sector, the pilot national co-generation programme (PNCP), the medium-term power purchase programme and the multisite baseload independent power producer programme.
Under the PNCP, Eskom invited suppliers to submit tenders. The utility is considering the proposals received between October 2007 and December 2008, says Eskom spokesperson Fani Zulu.
Eskom has put its 100MW wind farm at Klipheuwel in the Western Cape on hold until ‘a viable funding solution is found,” says Zulu. Other than this, Eskom has no other renewable energy plants in production.
Matzner says that although Eskom ‘does the bare minimum to get independent producers established”, he understands its concerns. ‘The way the power purchase agreements work means that Eskom has to take power as it is generated and with no cap,” he says. ‘So if you
have a wind farm, and the wind blows nicely on Sunday morning, Eskom has to take it at a fixed tariff, whether it needs it or not.
Who pays for that? Government still has to be clear on the cost recovery side for Eskom.” Matzner says the National Energy Regulator of South Africa (Nersa) has not synchronised its procedures with Eskom. ‘How does the little guy fight both these organisations?” he asks.
Eskom may be taking ages, but with its future plans in wind and concentrating solar thermal power, at least it’s on the right track.
According to Peet du Plooy of the WWF, the initial ideal mix for grid-based electricity would be mostly wind and solar power and later could include sources such as ocean and geothermal power.
‘Overall,” he says, ‘if South Africa wanted to and committed to the development of a local solar industry, it could become a world ‘solar power’.” The most advanced plant with government involvement is the Darling Wind Farm, developed by the Central Energy Fund, the Danish Government, the Development Bank of Southern Africa and other private investors.
Regarding pricing, Eskom says that renewable energy is more expensive than conventional coal, and hence ‘it is inevitable that as electricity becomes more expensive to produce, it must result in an increase in price”.
But Du Plooy says this increase need not be major or permanent. ‘If we build 15% of our energy from renewables at double the present household price, the overall price would rise by only 15%,” he says.
Complementing renewable energy with energy efficiency could lead to no net increase in the price of electricity by 2020. ‘If we are able to attract carbon funding for these initiatives, costs could drop by as much as 18% with carbon credited at $20 a ton,” he says.
Energy prices will rise at first then stabilise, he says. It is imperative to take into account the real cost of using coal, which is excluded in the current electricity price. ‘The trucks in Mpumalanga carting coal are damaging the roads and the taxpayer has to pay for that,” he says. ‘The plants in Mpumalanga emit sulphur dioxide, which makes people sick.
The cost of their treatment is not paid for by Eskom or the government.” Du Plooy says that the cost of energy will increase in the future, regardless of which option we choose, but by using renewable energy we can cap those increases, as opposed to fossil fuels, the scarcity of which alone is a reason for guaranteed increase.
The government should start by buying renewable electricity for its own use, he says. It needs to prioritise the development of a solar industry for reasons of energy security, green growth and jobs.
The department of energy had not responded to questions about the country’s energy mix from the Mail & Guardian by the time of going to press.