MORE than 50 years ago British prime minister Harold Macmillan angered the apartheid government when he told its parliament that the wind of change was blowing through Africa. Now a new, revolutionary wind could blow away energy poverty as an obstacle to the continent’s aspirations.
The International Energy Agency estimates that 625-million sub-Saharan Africans are without power. The World Bank says 25 countries in the region face a crisis of weak energy capacity, poor reliability, and high costs.
In just five years, 92 independent power producers secured contracts in SA with a combined nameplate capacity of 6,327MW.
The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) seeks clean energy with societal benefits, using a level cost of electricity as a metric that divides lifetime costs of production by electricity produced.
Siemens’s new yardstick — society’s cost of electricity — includes job creation, employment effects, health and geopolitical risks, and security of supply.
Since 2011, renewable projects have attracted R193bn of private investment; R19.1bn has been committed to socioeconomic development over 20 years and R6bn to enterprise development. The total projected value of goods and services procured from broad-based black economic empowerment suppliers is more than R101bn.
The energy centre at the Council for Scientific and Industrial Research (CSIR) determined that the two terawatt-hours (TWh) generated from solar and wind facilities during the first six months of 2015 contributed a net benefit to the economy of up to R4bn.
REIPPPP stipulates local community ownership of 2.5%, but their actual shareholding across the procured portfolio is 10.5%.
South African equity shareholding across bid windows one to four is 47% of R65.8bn.
Renewable energy production has cut the equivalent of 4.4-million tonnes of carbon dioxide.
The state’s 2010 Integrated Resource Plan calls for 17,800MW of renewable energy by 2030 — a fifth of predicted demand. The Department of Energy has committed to 13,225MW of renewable energy generation by 2025.
SA has excellent wind potential, as shown by its pioneering Verified Numerical Wind Atlas. Accurate data is imperative for investors.
About half of SA’s new renewable energy capacity is from wind, with 700 turbines soon to be installed, generating 1,983MW of power. That’s almost 70% of Medupi’s capacity, with no emissions, no fuel costs, and far greater social benefits.
The average time for wind farms in SA to reach commercial operation is 640 days from financial close, far faster than a new coal-fired operation. According to a CSIR report, wind energy produced net savings of R1.8bn in the first half of 2015, and was cash positive for Eskom to the tune of R300m.
The REIPPPP bids have high oversubscription, driving down costs. The price of wind energy in round 4(a) was R619 per MWh — almost 40% below forecast prices for Medupi and Kusile.
Eskom’s renewable energy business unit is behind Sere in Vredendal, Western Cape, SA’s first utility-scale wind farm. It achieved full commercial capacity of 100MW in April 2015.
Its average annual energy production of 298,000MW/h saves 6-million tonnes of carbon dioxide emissions over its 20-year life span.
At the Jeffreys Bay wind farm, 60 Siemens wind turbines supply enough clean energy for 100,000 average homes. More than 600 people were employed at the peak of construction of the wind farm, nearly half from local communities.
Wind energy projects could generate more than R5bn in revenue for local economic development over the next 20 years.
Developing skills in wind energy at the South African Renewable Energy Technology Centre in Cape Town will create capacity for SA to become a hub for Africa’s wind power development.
Wind power is perfect for Africa. Not only is it about 40% cheaper than new coal power, but it is a lot less water intensive than fossil fuel generation, with savings of 2,000l of water per MWh.
The UN Environment Programme 2014 report placed SA among the top 10 countries for renewable investments. South Africans underplay their triumphs.
by Janek Winand
• Winand is vice-president of wind power and renewables for Siemens Southern and Eastern Africa