Solar energy in South Africa

Dipuo Peters, Minister of Energy and member of parliament, has a long and impressive career in politics, but her passion for her current portfolio is remarkable and contagious. While listening to the plans her department has in terms of creating greater energy resources and greener energy supply, one realises that as citizens we are often negative about the energy situation in South Africa and the possible changes initiated by our government – without knowing the real facts and without visualising the bright future it can bring.

It is important to pay as much attention to the small issues as to the big ones.

Access to energy promotes economic growth and greater social equity, allowing the world to thrive. Energy poverty creates societies that are condemned to darkness and ill-health, stunted education and missed opportunities resulting in a lack of prosperity.

As remarked by the Department of Energy’s Deputy Minister Barbara Thompson at the recent Electrification Indaba in Durban, “development is not possible without energy, and sustainable development is not possible without sustainable energy.”

As many as 1.4 billion people across the globe have no access to electricity, of which 90% live in rural areas. This drives people to move to the city where they end up living in squalor, creating a major housing crisis. Our problem is not unique, but our solutions will not only benefit our own country, but the entire continent.

March 2012 is energy month and an Electricity Indaba was held with various stakeholders. The United Nations declared 2012 the year of universal access.

According to the White Paper on Energy Policy for South Africa (1998), ”Government commits itself to implementing reasonable legislative and other measures, within its available resources, to progressively realise universal household access to electricity.”

About 82% of formal housing, constituting 75% of all households, has been electrified to date. This equates to 5.4 million new household grid connections and 46 000 non-grid connections in two decades – a significant achievement in the face of a fast-growing population. Yet, the government is still faced with various challenges such as increased electrification targets and costs as well as delivery capacity. In order to achieve its goals, all resources will be explored: traditional and new, coal, gas, solar power, hydro, biofuel, wind energy or hybrid energy.

An astonishing 90% of South Africa’s electricity is still being produced by coal, while nuclear constitutes only 5% of our total electricity output. The country also supplies two-thirds of Africa’s electricity, including electricity supplied to ourselves.

Although Africa is rich in reserves to produce energy (think of coal, water, gas, uranium, etc.), energy is still mainly produced by South Africa. The reason is that our country is one of the major industrial countries on the continent, making it a logical energy hub.

A plan for the future

According to our government’s Integrated Resource Plan (IRP) for Electricity of 25 March 2011, 42% of all energy should be renewable energy. The IRP shows a commitment to the security of supply through a clear path (2010 to 2030) into achieving these objectives.

“It is a major step toward building local industry clusters and assists in fulfilling South Africa’s commitments to mitigating climate change as expressed at the Copenhagen
climate change summit,” reads the report.

The policy indicates a plan for 17,8-gigawatts of renewable energy compared to 9.6-gigawatts nuclear and 6.3-gigawatts coal. A total of 8.9-gigawatts will come from other generation sources. Nuclear, for one, will produce 23% of electricity compared to the current 5% – quite a drastic change from the present.

While Eskom currently produces 90% of the country’s electricity, the government’s plan is to allow for 30% production by independent power producers (IPPs). These could include local as well as international investors and producers.

Most South Africans are concerned about the price of electricity. The government has recently negotiated a lower increase in electricity prices than expected. One can easily imagine that foreign investors would prefer higher energy prices to ensure revenue from their investments. Minister Peters assures: “Investors are not only motivated by prices. Besides a return on investment, they are also attracted to a stable environment and opportunities.”

South Africa is a developing country, creating good opportunities for investment. Commercial agreements will be long-term, ensuring these companies will reap the benefits of
their investments.

Another motivation for the lower electricity price increase, is that small, medium and micro enterprises are good job creators in our country. Most of the time they rely on municipal electricity, where a surcharge has already been added onto the electricity prices. In order to keep these businesses afloat, the government has to ensure electricity remains affordable to them as well. The cost of electricity should not be a deterrent in establishing or growing a sucessful business.

Renewable energy

So what renewable energy can we be looking forward to, and who will invest in these expensive projects?

The government is currently in talks with the sugar industry regarding the production of biofuels. Sugar, soya and maize and other crop products can all be used in the production process. Since maize is a staple food, however, it has been scrapped as on option for biofuel production.

One of the government’s plans is for a solar park in Upington to produce 5 000 megawatts of solar energy in 10 years’ time. Land has been identified and a pre-feasibility study has been done on the environmental impact of such a project.

Land will be leased to small and large IPPs, with the emphasis on giving preference to local technologies which, in turn, will promote job creation in our country. The project opens up new and exciting possibilities for industrial development. Various countries such as Denmark and the United Kingdom have shown interest in investing – unlocking much-needed funding into these developments.

Whether or not leases will be granted to local or foreign investors, it is guaranteed to create thousands of new jobs for unemployed South Africans.

The government has installed home solar systems (not to be confused with solar water heating systems) at a rate of approximately 10 000 per year.

With the solar water heating systems, the aim is to encourage people not to use their free basic electricity for water heating – saving not only electricity, but money as well.

“People who already have renewable energy are the best advocates for it,” Peters says. She tells a story of a lady who was one of the first recipients of solar water heating panels subsidised by the government. When the minister visited the lady’s home, the lady joyfully exclaimed: “Hierdie ketel op my dak!” (This kettle on my roof!)

As in other sectors of energy production, however, the government has discovered that training is vital with new projects. With this Peters refers to the installation of solar water heating systems. Plumbers and electricians had to be trained in order to successfully install the systems. “Just because you are an electrician, doesn’t mean that you are able to work on everything from solar heaters to nuclear. We want to train our artisans so that we can provide opportunities for local skills.”

She is excited about diversification of energy. South Africans should stop thinking about household energy as electricity alone. If different types of energy can be used in conjunction with each other, it will not only relieve the electricity production load, but also encourage greater use of renewable energies which, in turn, would stimulate economy. For instance, as with many households, we use a combination of conventional electricity produced by coal or nuclear as well as gas (perhaps a gas stove or a gas heater). Our country lends itself to effective use of solar power for all households.

In the government’s 20-year plan for renewable energy, it aims to achieve energy production consisting of 8 400 MW wind power, 8 400 MW solar power and 100 MW concentrating solar power energies.

So far, 20 bidders have qualified and investors have shown a growing interest.

The government is in negotiations with the Democratic Republic of Congo to establish a hydroplant in that country, which in turn has the potential to create a further 39 000MW of electricity.

Although Africa is rich in uranium, coal, gas, liquid fuel, water and oil, it remains an energy-poor continent.

The minister says with a laugh: “With all that’s available to us, we can light up this Dark Continent.”

Many rural areas have no access to electricity and rely solely on alternative energy sources. To acquire this, they often need to travel great distances. In aid of this, a total of seven integrated energy centres (IECs) have been established. These centres mostly supply liquid energy, for instance paraffin for cooking and diesel for tractors and transport. At some of these centres, residents are able to buy municipal electricity vouchers for prepaid meters. IECs then start playing a major role in the sustainability of businesses and farms in their areas.

Not only do these centres deal in an efficient and direct manner with energy poverty, many of them also become hubs for other activities.

One example of this is in former president Nelson Mandela’s hometown, Xunu, where the IEC sports a library and a computer centre. This enables local residents to purchase energy, exchange reading material and check emails at one central point.

Some of these IECs also comprise bakeries and utility shops.

IECs are managed as business concerns by community co-operatives. These are members elected by the community to run the facilities concerned.

Peters recognised that a lack of skills was causing these promising concerns not to perform to their potential. The Small Enterprise Development Agency is now providing business training to those involved in running these IECs and greater success has been achieved as a result.