The Communities For Wind organisation has been established under the auspices of the South African Wind Energy Association (SAWEA), to ensure people living around the wind farms benefit from their operations.
Wind energy holds the promise of cheap, reliable power and an opportunity to address the poverty that bedevils South Africa’s farming communities.
Poverty and inequality are at the heart of the unrest that recently convulsed the winelands.
Political shenanigans may have contributed to it, but there should be agreement across the political spectrum that rural poverty constitutes a national crisis and a grave injustice.
There’s no silver bullet for the desperate circumstances facing millions of the rural poor, but South Africa’s growing need for affordable energy is likely to contribute to much-needed socio-economic development.
It also has direct bearing on concerns raised at the National Energy Regulator of South Africa (Nersa) hearings about energy security and the impact of rising electricity prices on economic growth.
Obviously, it’s enlightened self-interest for any company doing business in South Africa to promote economic development. But the renewable energy sector also has mandated deliverables from the Department of Energy (DOE).
The 28 wind farm projects approved by Round One of the DOE’s Renewable Energy Procurement Programme (REIPP) will bring R47 billion worth of investment in renewable power.
Of gross revenue, 1.5 percent from these investments must contribute to socio-economic development and 0.6 percent must contribute to enterprise development within a 50km radius of the relevant project.
On top of this investment, the community is required to be given ownership, this varies anywhere from 2.5 percent to 40 percent.
This could see around R2.5bn being contributed to socio-economic development and about R1.1bn being contributed to enterprise development. If that seems nebulous, consider that a 140 megawatts wind farm project (the biggest permitted at the moment under the DOE’s guidelines), could see around R50 million allocated toward socio-economic and enterprise development in the first six years of operation.
It’s an initiative that holds great promise for rural economic development, enabling the establishment or upgrading of schools, community centres, sports facilities and job creation projects.
Wind will create about 2 000 direct jobs in the rural areas of the Northern, Western and Eastern Cape. That will lead to the creation of other jobs. How many is hard to gauge, but in Australia, one study found that 3.3 jobs were created for every job created on a wind farm.
Internationally, a number of wind farm operators have agreements to pay dividends to the farmers on whose farms the turbines are sited. A similar arrangement will be undertaken in South Africa, although precise agreements may vary from farmer to farmer.
A lease agreement could see a farmer earning many thousands of rands for each turbine sited on their land. Exact sums will vary, depending on agreements with individual farmers. Crops may be planted and livestock grazed around the turbines, which run quietly. This will help individual farmers ride out the fluctuations in the prices of their produce, as well as the vagaries of drought and the “lean years” with which agriculture has coped for millennia. But in a wider context, it’s effectively a subsidy for food security and the longevity of the farming sector.
The fact that wind energy doesn’t use water is another benefit for a water-stressed country with energy security issues and a pressing need for economic growth. That wind-farms must be built wherever the wind blows means that it can drive not only energy security but economic development in areas where residents have few economic opportunities.
Wind energy holds none of the risks of pollution to air, soil and water that accompanies coal production. There’ll be disruption to roads when the turbines are transported to the wind farms, but motorists’ annoyance will be short-lived as wind farms take about two years to build. A positive spin-off will be the upgrading of roads, which will be covered by the developers.
But what of the claims that wind energy kills birds and bats and is costly and unreliable? The notion that wind energy is inefficient ignores the strides made in technology in recent years. In this sense, South Africa will benefit from adopting wind energy later than some other countries. A useful comparison is the leapfrogging of digital communication in some areas of Africa, which bypassed copper-wire telecommunications, going straight from no communications at all, straight to internet enabled mobile communication.
There are stringent environmental impact assessments required before a wind farm can be established, and these help to limit risks to wildlife. But those risks must also be seen in context: nature magazine reported that while wind turbines kill up to around 400 000 birds in the US each year, communication towers kill around 6.8 million, while cats and glass windows killed up to a billion each.
Also, the criticism of wind-energy is that wind doesn’t blow consistently so its ability to supply power efficiently is simply uninformed. Wind-mapping and forecasting (charting where and how strongly the wind blows) has advanced in recent years.
A sober look at costing is informative too. The cost of power from fossil fuels is climbing and will continue to do so, while the cost of power from wind will drop. A comparison: when the first phase of Medupi power station starts generating power at the end of 2014, it will do so at around 97 cents per kilowatt-hour (kWh), according to Nersa. Wind, which is the cheapest form of renewable energy, will cost around 89c/kWh.
The benefits of that are clear, even without factoring in the costs of load-shedding (somewhere around R75/kWH) and the generators used for peak power (around R4/kWh to R7/kWh).
Lastly – and this should be good news for hard-pressed taxpayers – the costs of building wind farms will be borne by investors, not the public. This will reduce the strain on the country’s already creaking financial position.
In short, wind energy provides a cheap, reliable and mature source of energy and economic development and is an integral part of South Africa’s energy mix. It will also help address the national tragedy of rural economic poverty.
South Africa has considerable wind energy resources and wind energy is becoming a significant source of electricity, employment and investment.
South Africa has an energy intensive economy, largely reliant on coal-fired power stations. Power is supplied by the electricity public utility monopoly Eskom, one of the biggest utilities in the world in terms of generation capacity (approximately 37GW). It is estimated that South Africa will require an addition 40GW of power by 2030.
With a reserve capacity of less than 10%, South Africa urgently requires installed capacity.
South Africa’s Integrated Resource Plan (IRP), a 20 year national electricity plan, was promulgated in 2011. In the IRP, renewable energy makes up 42% of new generation capacity (17.8 GW), of which wind comprises 9.2 GW. By 2030, renewable energy is expected to constitute 9% of the energy mix.
With the country’s excellent wind resource and with the levelised cost of new coal generation already estimated to be more expensive than the first wind projects, Windlab believe that more ambitious targets – 10GW of installed wind power in the next 10 years – should be set.
In 2011, the Department of Energy launched the Renewable Energy Independent Power Producers Procurement Programme (REIPPP).
The REIPPP is regarded as one of the most sophisticated renewable energy procurement programmes in the world. The programme follows a competitive bidding process, with projects required to meet stringent qualification criteria. Qualifying projects are then evaluated 70% on tariff, and 30% on their local economic development plan.
As of November 2012, 47 renewable energy projects – including 15 wind projects (1195MW) – have been named as preferred bidders in the first two rounds of the REIPPPP. These included two projects (Amakhala Emoyeni Phase I and West Coast One) that were initiated and developed by Windlab.
Windlab co-developed the 90.8MW West Coast One project near Vredenburg in the Western Cape in partnership with Moyeng Energy and in December 2011, Windlab sold the development rights to the 137.9MW Amakhala Emoyeni Phase I project to Cennergi, a joint venture between Exxaro and India’s Tata Power Company.
Since 2007, Windlab has been developing a portfolio of South African wind farm sites in partnership with Moyeng Energy and Cennergi, in addition to our own wind farm portfolio with a combined potential capacity in excess of 2,000MW.
Windlab’s WindScapeTM technology has a strong advantage in South Africa and provides Windlab and our partners with an opportunity to enhance our portfolio of premium wind projects.
Peter Venn is the managing director of Windlab South Africa, while Dipolelo Elford is an executive director and heads Communities for Wind.
