- South African Renewable Energy Council (SAREC), 14 March 2017[Feature Article]Read more
Until now, if people in and around Groblershoop in the Northern Cape needed to see a state doctor, they’d have to wait a month for the travelling government clinician to stop in town for a single day. And then they’d have to queue at the local clinic, alongside every other person who had also been waiting for weeks to get treatment, and hope there would be enough time in the day for the doctor to see everyone.
Like so many rural towns in the region, state healthcare services are spread this thin. The town doesn’t even have a pharmacy.
This is why ACWA Power, the Dubai-based company that owns the new 50 megawatt (MW) Bokpoort concentrated solar thermal power plant (CSP) about 10km outside of town, has teamed up with LoveLife to bring a full-time doctor to town.
LoveLife traditionally focuses on bringing HIV/AIDS-related education to youth from the ages of 12 to about 19. But when the organisation did a needs assessment of the ǃKheis Local Municipality - which services six towns, including Groblershoop - it found that the lack of a full-time state doctor was a gap that needed filling urgently.
Meanwhile, ACWA Power’s CSP plant was just coming into operation outside Groblershoop. The Bokpoort plant is part of the state’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme, one of 96 renewable power plants that the state has commissioned to be built across the country.
As part of its contractual agreement with the Department of Energy (DoE), a percentage of the revenue earned by selling the Bokpoort plant’s electricity to the grid, must be spent on local social or enterprise development in communities living within a 50km radius of the plant. With this in mind, ACWA Power decided to team up with LoveLife in order to fund the organisation’s expanded operation in this municipality.
The five-year funding commitment, which will be open for renewal, supports the teams of LoveLife education volunteers, pays for this full-time doctor who will be based at the Groblershoop clinic, and will fund the bus services that will bring people in from the surrounding communities in order to see the doctor.
This funding also gives LoveLife enough security to invest in building a small youth centre on a piece of municipal land where they have been granted a long-term lease.
ACWA Power funds many other development projects in the area, and will be able to increase the investment if it is allowed to proceed with expanding the plant. The DoE has approved an expansion of the plant, and the power producer is waiting for Eskom to finalise the contractual paperwork that includes agreement on the price that the state will pay for electricity which will be generated once the second phase of the plant is up and running.
Eskom is delaying the paperwork on 26 such plants around the country, in turn delaying their construction, and the timeline in which plant operations will begin. As a consequence, this delays the flow of funding into community development work in all the regions.
- South African Renewable Energy Council (SAREC), 01 March 2017[Feature Article] The South African Renewable Energy Council (SAREC) has issued a statement in response to the Coal Transportation Forum’s press notice, relating to the reasons behind their unfortunate industrial action in Tshwane this morning. SAREC believes that the statement contains a number of factual errors which need correcting. “We would like to firstly point out that the reduced coal consumption of up to 10 million tonnes by 2021 is actually part of Government’s policy and it is consistent with South Africa’s climate change commitment,” says Brenda Martin, Chair of SAREC.Read more
“Furthermore, Eskom has its own ambition to procure and own 9,6 GW of nuclear plant by 2030 as anticipated in the 2010 Integrated Resource Plan and which is consistent with the utility’s support for the “Carbon Budget Nuclear” scenario of this resource plan,” added Martin.
It is common knowledge that South Africa, along with the rest of the world, is transitioning from coal to other energy sources, be it renewable energy, gas or even nuclear. This is a challenge and the reality being faced by countries around the world. “The renewable energy sector globally has shown itself to be even more successful at job creation than the coal or nuclear industry and we believe that we will prove that in South Africa,” she said.
Finally, SAREC is concerned about who has been providing CTA with its information, particularly in the light that Mr. Koko has been constantly posting in social media parroting the same “facts” during the morning. We believe it is important that people enter into informed debates on the fact of the matter rather than feeding off misinformation.
SAREC is open to engagement with the leadership of CTA to discuss the matters further if there is any clarification required on the facts above.
In direct response to the CTF’s statement, SAREC’s outline includes:
- SAREC would like to refer the CTF to Table 11 of the 2017 Budget Review which shows that the contingent from IPPs will be R104 Bn rather than the R700 Bn indicated in their statement. At the same time Eskom’s contingent liability will have risen to R284 Bn. We would like to suggest that CTF contact National Treasury for confirmation of these facts.
- If CTA would refer to the IRP 2016 update of the IRP, Komati, Hendrina, Arnot, Camden and Grootvlei power are due for decommissioning by 2030. Eskom has performed a life extension exercise for the rehabilitation of these. In fact, Eskom plans to decommission some 27,5 GW of coal-fired plant by 2040 which will result in a total of 12 thermal plants being closed. Eskom has performed a life extension exercise to confirm the feasibility of repowering the plant, which has been shown to be too expensive. SAREC would like to propose that CTA contact both the Department of Energy and Eskom for confirmation of these facts.
- The construction of the Medupi and Kusile coal-fired plants which would replace a number of these old plants will result in a reduction in Eskom’s coal procurement by some 30 million tonnes per annum.
- The reduced coal consumption of up to 10 million tonnes by 2021 is part of Government’s policy and it is consistent with South Africa’s climate change commitment. Eskom’s own ambition to procure and own 9,6 GW of nuclear plant by 2030 as anticipated in the 2010 IRP and which is consistent with the utility’s support for the “Carbon Budget / Nuclear” scenario of the IRP.
- SAREC would like to suggest that CTF engage actively with Mr. Matshele Koko, the interim CEO of Eskom to confirm Eskom’s position on nuclear and the consequences that it will have on the Limpopo and Mpumalanga coal industries.
- SAREC would propose that CTA speak to both Eskom and the Energy Centre of the CSIR for independent verification of these facts.
- South African Renewable Energy Council (SAREC), 27 February 2017[Feature Article] Delays by Eskom to sign off the next round of state-commissioned wind farms has cost a local black-owned transport and rigging company 30 jobs since November 2016.Read more
Now, if the state utility does not follow through on the Minister of Energy’s instruction to finalise contracts with the independent energy firms that are earmarked to build and run these farms, it could further jeopardise the hauling operator, which since 2014 has upgraded its facilities to the tune of R60 million in order to meet the new growth in the renewable energy sector here.
Absolute Rigging, a Cape Town-based specialist in hauling abnormal loads, has been shipping steel and concrete wind tower segments between manufacturing plants in Cape Town and Port Elizabeth, to new wind farms being built in the Western and Eastern Cape provinces since 2014. It also ships blades and turbine generator housings (the ‘nacelle’) from local ports.
But orders for tower parts have dried up since November 2016, and no new shipments are coming from the wind tower manufacturers.
‘We have a had letter of intent from our next (wind farm) client since April 2016, and were meant to start shipping the tower segments in September last year,’ explains Absolute Rigging owner Armien Hassiem.
However, construction has still not begun on this farm near Cookhouse in the Eastern Cape, and orders cannot be processed.
This delay is due to the failure of Eskom to finalise the power purchase agreements (PPAs) with private energy firms which the Department of Energy (DoE) has already approved as part of its utility-scale renewable power programme which started in 2011. Since then, the department began commissioning 96 renewable plants, using mostly solar and wind technologies, and about half of these plants are already operational and selling electricity to the grid. But construction is on hold on the next round of 26 plants, owing to Eskom dragging its feet on the price that it will pay for the electricity that these plants will provide to the national grid.
Until now, Absolute Rigging has specialised in servicing the oil, gas, mining, and construction industries. However, Hassiem says the firm invested R60 million in additional equipment for hauling abnormal loads for the wind industry in 2014 when he saw that the domestic rigging industry lacked the specialist equipment needed to move turbine components around the country. This includes truck tractors, multi-axle and extendable blade trailers, cranes, as well as specialist ‘tower clamp’ trailers that can’t be repurposed for hauling other abnormal loads.
The company also hired an additional 50 staff to join the existing 80 in order to accommodate this growth in demand.
These jobs include heavy duty and escort vehicle drivers and their assistants, project managers, supervisors, and site managers. The company also hires a number of unskilled labourers on the delivery side, to assist with offloading the cargo.
A typical load
The first power plant which the rigging operation delivered components to was the 138 megawatt Gouda Wind Farm, about 110km north of Cape Town. It took eight months to haul the 782 loads of concrete tower sections, each of which weights 55 tons.
However, the boom in wind farm construction came to a halt in late 2016 as new plants await contractual sign-off from Eskom.
The last order for tower segments that Absolute Rigging shipped was in December 2016, from Port Elizabeth-based manufacturer DCD Wind Towers. Earlier this month, it was reported that the factory was on the brink of closure, owing to these delays, as the facility has been standing idle since the last orders were shipped out.
During last week’s budget speech, finance minister Pravin Gordhan announced the Treasury’s commitment to the DoE’s renewable energy programme, and energy minister Tina Joemat-Pettersson has instructed Eskom to finalise these agreements. However Eskom has given no firm date on when it plans to respond.
- South African Renewable Energy Council (SAREC), 21 February 2017[Feature Article] When a 44 megawatt solar plant turned on its lights just outside the Karoo town of Touws River in December 2014, a percentage of the revenue it earned from selling electricity to the national grid immediately started trickling through into the town’s sluggish economy. Leonie Joubert visited some of the businesses that are part of an enterprise incubation scheme.Read more
‘Nice colour,’ someone quips at Jayce McKenzie’s sporty, burned-orange sedan, its metallic finish shimmering like scales under the Karoo sun. Low-profile mags give it a predatory edge.
‘I’m a nice colour!’ he fires back, flashing gilt-edged teeth.
The 37-year-old is a local from Touws River, one of those forgotten little transport towns in the Karoo which once serviced the railways, and now has the big rigs thundering past on the national highway, weighted down under their freight.
He says it’s his passion for music (pronounced with the Cape’s quaint inflection: passin, rather than pashion) that got him into the sound equipment hiring business about eight or nine years ago.
‘Oh, anyone who needs sound - churches, the rugby club, parties. Mostly parties. And weddings!’
About two years ago, Jayce heard through the local municipality that there were a series of business incubation initiatives starting up. Gathered in a town hall meeting, they were given an overview: the two initiatives were to be funded with the income earned by the new solar power plant that had opened up out of town in 2014. The plant’s development branch, Knowledge Pele, was going to start up two programmes: an entry-level enterprise development plan to help take aspirant entrepreneurs through the ‘ideas’ phase of developing and conceptualising a business over a six-month period; and a two-year programme to inject skills into existing businesses so they can run more effectively.
JC Sounds was one of the first seven businesses to be selected for the second programme.
What has Jayce got out of the collaboration?
‘My business is doing well now, everything’s expanded, man,’ he drawls from inside the shadow of his baseball cap. ‘They bought me some equipment. I learned how to do my admin, because I didn’t do that before, like filing and invoicing and stuff. And I learned about management…’
He is running late to pick up his child from school, he says, and needs to get going. But he’s keen to talk about his operation.
‘Ja, I play all over, De Doorns, Lainsburg, wherever there’s a need.’
What’s next for him?
‘I need a stage,’ he says, ticking items off a mental list, ‘and some lighting. See, I’ve got this gig in Robertson next Saturday.’
Expanding to have a stage and lighting, on top of the sound gear, would take JC Sounds up a notch or two.
And, does he play the decks? You know, that whole DJ thing?
‘Oh yes, I play as well,’ he grins, flashing gold again.
- South African Renewable Energy Council (SAREC), 20 February 2017[Feature Article]Read more
When a 44 megawatt solar plant was built just outside the Karoo town of Touws River, the private consortium that owns it had to ensure that some of the people it hired to help run the place are from nearby communities. Leonie Joubert met the security guards at the gate.
Rachel Natel has her no-nonsense face on this morning, as a car pulls up at the gate to the relatively new solar power plant about 10km outside of Touws River.
‘Blow onto this, please?’
She points to the blunt end of an electrical device in her hand, and nods. She’s not really asking. It’s only 9am, but security protocols are tight here: no booze in your system, if you’re coming onto the premises.
The 31-year-old later softens as she starts talking about herself: she’s been employed here as a security guard for two years. Before that, she was a farm worker, picking grapes and the likes.
The Touwsrivier CPV1 PV power plant is one of a series of 96 state-commissioned facilities that is being built around the country, as part of the Department of Energy’s utility-scale renewable energy programme. Some of the state’s conditions are that these private energy firms source a percentage of their equipment, materials, and services from within South Africa; that some of the skills come from within the local community; and that they run various socio-economic or enterprise development initiatives within local communities, to try and inject a bit of life into these often lacklustre rural economies.
Many of the approximately 50 plants that are already built and feeding electricity into the grid, took between 18 months and two years to build, resulting in significant construction-related jobs. All plants have a life expectancy of about 20 years, meaning that they will definitely provide operational jobs for two decades.
An analysis of the overall programme by Professor Anton Eberhard, an infrastructure specialist at the University of Cape Town’s Graduate School of Business, estimates that the number jobs across all 96 plants will be close to 110 000 in total, of which nearly 85 000 are specifically for black South Africans, and nearly 58 000 jobs for people living in the vicinity of the sites.
The cascade of jobs in the industries surrounding these obvious construction and operational jobs is harder to measure and predict, but shouldn’t be discounted, according to a Worldwide Fund for Nature (WWF) report, which reviews the wider employment implications of the programme.
‘The kind of enterprise development associated with these plants goes well beyond just what happens on the sites themselves,’ explains doctoral-level social scientist and consultant Holle Wlokas, who wrote the WWF report.
‘During construction, you can expect an increase in demand for many different services in the wider community, as the local population swells with the influx of people associated with construction.’
Local hotels and related accommodation businesses and food retailers, for instance, will receive a boost in demand.
‘Hardware stores and people in the transport industry are also likely to see an increase in trade.’
This analysis doesn’t include the possible benefits for the informal sector, which helps keep money circulating within the local economy.
Most of these jobs are associated with the construction phase, generally occurring in the first two years of a project. These usually result in unskilled work for local residents, and are temporary, but give necessary employment opportunities for those who might otherwise struggle to find work in economically stagnant rural areas. Operational jobs are usually more skilled, and are fewer in number, but are expected to last 20 years through the lifespan of the plants, which will be a further injection into local economies.
The Touws River plant has been fully operation since December 2014, and now employs around 35 people.
Rachel, and her colleagues Cedric Koopman (53) and Selwyn Africa (25), also security guards, are amongst those. It looks like there are long hours of waiting for not much to happen, out here amidst the farmlands of the Karoo. But when a car does pull up at the front gates of the plant, strict protocols kick in. This is a high voltage facility, and security has to be tight.
- South African Renewable Energy Council (SAREC), 17 February 2017[Feature Article]Read more
When a 44 megawatt solar plant turned on its lights just outside the Karoo town of Touws River in December 2014, a percentage of the revenue it earned from selling electricity to the national grid immediately started trickling through into the town’s sluggish economy. Leonie Joubert visited one of the businesses that is part of an enterprise incubation scheme there.
Most of the seamstresses at the Busy Bee sewing company in Touws River are old hands at this. They’ve been working their needles and thread since they learned the craft in high school, 40 or more years ago. And yet, every now and then, a job will come in that’ll flummox them.
‘Like those jeans there, the white ones,’ Mercia Lottering (50) quips, pointing to a folded pair next to a nearby sewing machine.
Maria Wagenstroom (63) picks them up. The legs tumble out, showing how she’s pinned each one so she can tailor them into a more fashionable ‘skinny’ fit.
‘Ja, these jeans are finished, but now we must fix them!’
Their ‘stressed’ look is from genuine wear and tear.
‘In this town, people want you to do everything!’ says Mercia. ‘Sometimes it’s impossible, but we must just do it.’
The banter goes back and forth: Maria and Mercia in the middle of the room, and Alida van der Merwe (50) at the front window with a green lace dress fanned out around her machine. Henrietta Olivier (22), perched on a bar stool at the back, says nothing, but her fingers blur as she knits another handbag. She’s not using conventional yarn, but bias binding tape. Maria points to a number of bags hanging along the wall, to show what the finished item will look like.
School tracksuits, ball gowns, wedding dresses, alterations, repairs, cutting patterns from scratch, even mending jeans that are at the end of their days - the seamstresses of the Busy Bee sewing company will do it all.
New life for old skills
This cheery little hole-in-the-wall business is in a rectangular sliver of a room, crowded in between a general dealer and a liquor store on Dwars Straat (literally ‘Across Street’) in Steenvliet, a suburb of Touws River. A single front window and the open stable door let in light, but there’s no sign above the shop to announce that this is where they’re at.
This is a well established business, but the four women have joined an enterprise mentoring initiative that’s trying to inject a bit of vigour back into Touws River’s torpid economy. And the endeavour is funded by the earnings from a new solar power plant about 10km out of town.
As the Department of Energy has commissioned a series of what will eventually be 96 renewable energy plants around the country, one condition of its agreement with the private firms that will build and operate these plants, is that a percentage of the revenue earned from selling electricity to the grid will be invested in development initiatives within communities in a 50km radius of the site. The 44 megawatt (MW) Touwsrivier CPV1 PV Plant was one of the first of nearly 50 of these renewable power plants that are already operating nationwide, and selling power to the national utility, Eskom.
And so it’s the community in Touws River itself that’s the focus of the development assistance from this plant. Knowledge Pele, the development wing of the consortium that owns and runs the power plant, is responsible for making the work happen. Since revenues first started trickling in during 2015, they’ve initiated bursary and internship schemes for youth, and two enterprise development initiatives for aspiring and established businesses, amongst others.
The Busy Bee seamstresses were amongst seven established operations that were recruited as part of the first intake in 2016. Knowledge Pele is still stress-testing these fledgling initiatives. If any of the established businesses don’t advance as quickly as might be expected in the first year, they can switch over to the ‘starter pack’ initiative, which takes aspiring enterprises through the process of conceptualising and starting up a business over a shorter six-month period.
Busy Bee was already registered as a company, with a bank account and their BEE certification. Alida was their financial manager. But now that they are half way into this two-year mentoring programme, they’ve worked with the development team to see what the business’s main needs are, and developed a plan for the coming year. They’ve gone to Cape Town for training in cost accounting and financial management. They’ve been helped with some additional equipment, like an embroidery machine, and capital to buy fabrics. And they’re re-thinking how they charge for their work, because they realised they’ve been undercutting themselves.
‘The materials we’ve been using are expensive, and we’ve been charging too little for the clothing we’re making,’ one of the ladies chimes in. ‘So we either have to buy cheaper materials, or we need to charge more.’
In 2017, they’ll carry on pooling their takings each month, paying the business expenses like rent and electricity, and then splitting what’s left over as their ‘salaries’. But with their amended pricing, hopefully things will start to look a bit more flush.
Not like this month, though. January is always tough.
‘There’s nothing left, now,’ says their financial manager.
They also need a bit more space. There’s no room in this tiny shop for another seamstress to join them. There’s barely room for cutting large pieces of fabric. Almost every surface is a bundle of stuff: piles of folded cloth, bags of sewing accessories, garments on hangers in various stages of completion or repair.
‘I would like to design, that’s my dream,’ Alida admits, from her station at the front of the room. ‘But you have to go to school for that.’
‘Or, if it’s natural, if it’s in you, you just do it,’ chirps Mercia. ‘But with all the measuring and calculating, it’ll help (to have training).’
‘No, I can’t be a designer because I don’t like mathematics!’ Alida again.
You must know how to work things out, they say: when a seam is 2.5 cm here, or maybe it’s 50 cm there, you have to measure it, work it all out.
‘It’s a lot of thinking. If you make a pattern out of your head, you have to check, for all sizes. Big, small, it’s too much!’
At the back of the room, Henrietta’s knitting needles click in a meditative rhythm, as Maria whips out her cellphone to scroll through the picture gallery.
‘That was the ultimate for me,’ she says, holding the phone out. A glammed-up teenager beams up from the screen, dark tresses tumbling down her bare shoulders, in a frangipani-pink gown with fitted bodice and fishtail skirt.
Her granddaughter, off to her matric dance last year.
‘And for the little one.’
Maria flicks the screen. A girl, probably four or so, in folds of the same pink. She wanted one too, Maria says.
Tricky designs like those are the ones that keep these women awake at night.
‘You lie at night and think ‘Oh, that dress, how do I…?’.’ says Maria.
Alida chimes in:
‘What I like, when there’s something I really don’t know how to do and lie awake at night, I’ll come in the next day and say ‘Now I know how to do it!’.’
‘We ask each other,’ another quips, ‘how can we do this? Because if you haven’t done something, for instance, if someone comes to you with that dress and says fix this, how must you do it if you have never done it before?’
Backwards and forwards, these partners of many years natter about how they get by, these seamstresses of the Busy Bee sewing company.
- South African Renewable Energy Council (SAREC), 16 February 2017[Feature Article]Read more
Since the 44 megawatt solar plant just outside the Karoo town of Touws River started selling electricity to the national grid in December 2014, a percentage of its revenue has been ploughed into giving study opportunities, work experience, and jobs to youngsters who might otherwise have few opportunities in the region’s lacklustre economy. Leonie Joubert met one of the plant’s ‘light voltage’ electricians.
There’s not a whole lot going on in Touws River at closing time on the average work day. A determined breeze trots down the main road, tumbleweeding a few paper bags between the loose groups of people who stroll languidly home. Do an internet search for ‘the best restaurant in town’, and it’ll throw back the name of a single fast food joint at a truck stop perched on the edge of the national highway which runs directly past town. It’s the kind of place where truckers pull onto the roadside at two, three, sometimes four o’clock in the morning, and stand next to their idling rigs, calling to one another while the thundering engines set the steel-framed windows of the town’s only hotel a-rattling.
Cornelius Flink is the son of a former railway man. He grew up in this small Karoo town which, like many that had blossomed along the sidings of the tracks that shipped most of the country’s goods about for decades, has seen its economy slow to an idle as the state throttled back the rail services in the early 1990s. There were a lot of retrenchments, he remembers, and ‘the town went down after that’.
Fortunately, freight still had to be moved around the country, and so long-haul trucks picked up some of the slack. But Cornelius was nevertheless amongst the next generation of town’s residents who finished school, only to find there wasn’t much by way of job prospects or further education.
Come a warm summer’s morning in January 2017, and the now 34-year-old Cornelius is standing in the control room in a solar power plant about 10km out of town, scanning a dashboard of computer monitors that are dotted with green icons, laid out in grids.
‘There are 30 blocks in all,’ the soft-spoken Cornelius explains, a two-way radio hanging easily from one hand. Each dot on the screen represents one panel of concentrated photovoltaic solar cells out there in the field, mounted on an articulated arm. There are 1 500 tracker-mounted panels across the whole site. Two of the dots, though, have flashed momentarily to red.
‘There’s one there,’ a colleague points to the righthand-most monitor, ‘and there’s another bad performance over there.’
Another grid has a single ‘warning’ sign: that universal yellow triangle with an exclamation mark in it.
Cornelius, one of the plant’s ‘light voltage’ electricians, explains the process: a technician will pop out to each of those trackers, plug a laptop into an electrical panel at its base, run a diagnostic, and then get the panel back online. All in a day’s work.
An electrician by trade
In his 20s, Cornelius came within a whisper of getting his electrician certificate. He was two prac units shy of getting his diploma from a college in Cape Town, when he was offered a chance to upgrade to a degree at Stellenbosch University. But things fell apart in his third year.
‘I was… distracted,’ he says, his fingers tightly entwined in front of him.
He was battling through his first semester - ‘The course is tough, especially in third year!’ - when his mother fell ill. Cancer. He failed his first semester, tried again, and failed again. Between that, moving out of the koshuis (the university residence), and trying to support himself with little funding, it was all too much.
He worked for a while - mundane jobs, like at a local fast food joint - but eventually came back home to live with his father, where he was without work for ‘two or three years’, he can’t remember precisely.
But then in 2012, a German company that supplies renewable energy equipment rolled into town, looking to recruit some local talent to train up as electricians for a plant that was about to be built about 10km out of town as part of the South African Department of Energy’s utility-scale renewable energy rollout.
Soitec, which specialises in concentrated photovoltaic solar technology, sent Cornelius off with 17 others on six months’ training, and then hired them to help install the electronics on the tracker control units and other aspects of the plant’s ‘light’ electronics.
This kept Cornelius employed until the plant was completed in 2014 (it went ‘live’ in December 2014). Once their contracts ended, he was once again left looking for odd jobs in town, until another opportunity linked to the power plant came his way a year later.
Knowledge Pele, the development wing of Johannesburg-based renewable energy firm, Pele Green Energy, was ready to start implementing the plant’s social responsibility plan. The consortium that owns and runs the site, of which Pele Green is a part, is required according to its contract with the state to channel a percentage of the revenue earned from selling power to the grid, back into the local community through various socio-economic or enterprise development schemes. This work spans the 20-year life of the plant.
One of Knowledge Pele’s initiatives is to link people like Cornelius up with internship opportunities in Johannesburg. And so, in 2016, he went to ‘the big smoke’ to spend a year working for an electronics firm, wiring up PV boxes, connecting the ‘DC’ side to the cable, working on the transformers and the lights.
‘Wiring the cables into the inverters, that needs attention to detail! There are a ton of wires in there. You have to use your wiring diagram.’
Once he returned from the internship, he was offered one of the operational jobs here at the power plant, where he and two others from the original course now work together.
Tracking the sun
Cornelius leads the way out into the field of trackers, after the mandatory breathalyser test and visitor safety briefing.
‘Beware of snakes and wildlife,’ the safety officer warns. Cape cobras and puff adders, lots of them, he says.
Cornelius is a quiet man, and needs to be drawn out on most topics, but when pressed, he smiles and admits that this is one of the more beautiful solar technologies.
Concentrated PV works on the same principle as burning paper with a magnifying glass: a panel is made up of a series of convex pieces of glass, each of which concentrates the sunlight into a blisteringly hot point of light, which is focused onto a photovoltaic cell that’s about the size of a pinky fingernail.
The conversion rate of sunlight to energy is much greater and more efficient than with standard PV cells. But to work, it needs to be technically on-point: the panel needs to stay locked precisely onto the sun, even as the Earth spins slowly through its cycle. The tracker must keep in lockstep, ensuring that the beam of light coming through each piece of glass remains in focus throughout the day, and doesn’t wander off its target.
Like daisy flowers turning their faces to the sun, these trackers will follow the arch of the sun through the sky, day, after day, after day, through the twenty year life of the plant. And technicians like Cornelius will need to be on standby, to make sure none of them goes offline in that time.
- South African Renewable Energy Council (SAREC), 09 February 2017[Feature Article]Read more
If Eskom does not sign off on the next round of state-commissioned wind farms within the next few weeks, one of South Africa’s two wind tower manufacturers will be forced to close its Port Elizabeth-based factory and lay off the remaining 143 staff. The facility is expected to close in April.
The R400 million facility was set up in 2013 on the basis of the Department of Energy’s (DoE) energy policy, which forecast a relatively steady and predictable investment in new wind generation capacity between now and 2030. The state also ruled that a percentage of materials and skills for its renewable energy rollout should be acquired in the domestic market.
But after supplying steel towers to wind farms in the Eastern Cape since April 2014, the production line at the DCD Wind Towers facility has been standing idle for three months, since no new orders can be processed.
These delays are owing to the failure by Eskom to finalise the power purchase agreements (PPAs) with private wind energy firms which the DoE has already approved as part of its utility-scale renewable energy programme. Since 2011, the DoE has begun commissioning 96 renewable energy plants, using mostly solar and wind technologies. Half of these are already operational and selling electricity to the grid.
But construction has been delayed on the next 26 power plants, some of which are wind farms, because of Eskom’s failure to finalise the contracts that will determine how much the national utility will pay the private companies for the electricity sold to the grid. Since being given DoE approval, developers have been kept waiting by Eskom for nearly two years.
DCD Wind Towers general manager Alta-Mari Grebe says the factory has been at a standstill since the last tower unit was shipped out in November 2016. Since then, the staff complement shrunk by 29 as contracts were not renewed, or as skilled and semi-skilled employees sought work elsewhere amidst uncertain about the future of the plant.
‘The factory was built with an anticipated demand (for new capacity) until 2030, by which time we would have recouped our investment. But this factory is just over two years old. It doesn’t make sense to recapitalise now,’ she says.
The plant produces the tower sections which, once assembled on site as a complete tower, are between 80m and 90m tall. The process involves turning sheet metal of different strengths into the curved walls of the towers, and requires skilled and semi-skilled artisans, such as welders, boiler makers, electricians, and ‘blasters’. The process of priming and painting is done by hand, and is labour intensive.
‘Many of the artisans we hired, had to undergo additional training, because this requires industry-specific skills,’ Grebe says.
The factory is located in the Coega Industrial Development Zone, in the Eastern Cape, where the unemployment rate is higher than the national average.
‘We started out with 172 employees. Now we have 143 going onto short time.’
While Grebe declined to say how many wind towers the factory would produce as a result of the pending wind farms, she said that the anticipated demand from the new plants is sufficient to keep both of SA’s tower factories in work for the next three to four years.
- South African Renewable Energy Council (SAREC), 07 February 2017[Feature Article]Read more
Leonie Joubert is a regular contributor to the Heinrich Boll Foundation’s Energy Transitions. This column was published by the HBF this week.
This year, the South African government has the chance to set in place the kind of policy environment that will incubate local manufacturers and encourage foreign investment in the renewable energy sector here. But if the current draft policy is approved, it will create market uncertainty and drive investors away.
The government’s draft blue-print for how South Africa will power its electricity grid over the next few decades is being mulled over by experts and activists right now: the 2016 Integrated Resource Plan (IRP), will decide how much of that power will come from coal, nuclear, gas, or renewables between now and 2030. The infrastructure it builds as a result of this plan will live with us for decades beyond that, and determine the cost and carbon intensity of that grid.
The draft IRP is currently out for public comment. While it does allow for investment in solar and wind infrastructure until 2030, critics say that it sets up a ‘boom and bust’ demand which will undermine the country’s long-term industrialisation potential. In its current shape, the draft policy also threatens the viability of many smaller emerging businesses along the wind and solar value chains.
This version of the IRP allows for some growth in demand for wind and photovoltaic (PV) plants between now and 2021. But for the years 2021 and 2022, the plan does not include new investment in new wind power, and very little PV. From 2023, it allows for a small amount of new wind capacity again, after which demand picks up again slightly for both.
The likely effect of this two-year gap in demand is a boom-and-bust environment that creates investment uncertainty, argues Brenda Martin, chair of the SA Renewable Energy Council, SAREC.
‘Factories will have been set up between now and 2021 to meet a growing demand, and staff will have been trained. But from 2021, orders for parts will slow dramatically or stop. This will result in job losses and factory closure,’ she says.
Manufacturers already feeling the pinch
The implications of a boom-and-bust demand are already being felt in these sectors, due to current delays by the national utility, Eskom, in finalising deals with private wind and solar energy firms as part of the government’s Renewable Energy Independent Power Producer Procurement programme (REIPPP).
Demand for wind and solar parts and skills picked up dramatically in 2011 when the Department of Energy (DoE) began a process of commissioning 92 concentrated solar power, PV, biomass, landfill, wind, and small hydro plants to be built and operated by private energy firms under the REIPPP programme.
Half of these have been built and are already operational. But construction of the next 26 plants has been on hold for over 20 months, as Eskom has delayed signing the contracts which will set the price for how much it state will pay for the power which these privately-owned plants will generate over the next two decades. There is an investment value of approximately R50 billion associated with these plants.
These delays are already threatening two local wind turbine manufacturers, according to the Centre for Scientific and Industrial Research’s (CSIR) principal energy researcher Ntombifuthi Ntuli. This, she says, demonstrates what similar boom-and-bust demand could mean for the long-term sustainability of such enterprises.
“The manufacturing sector is the first to feel the heat when these sorts of delays happen,’ she says. ‘When construction is put on hold like this, manufacturers are forced to lay off staff and eventually close factories. They have made a huge investment in training people. If they have to close a factory in response to the market shutting down for two years, they don’t know if they will be able to restart once construction picks up again.”
The SA Photovoltaic Industry Association (SAPVIA) is also concerned about the impact of Eskom’s contract delays on the PV value chain. Even though most PV panels are still imported, local businesses providing steel frames or installation services are negatively impacted.
A similar dip in demand will occur between 2021 and 2023, if the current IRP draft is not amended to guarantee a more stable and continuous demand over the next two decades.
“This two-year lull in wind energy demand between 2021 and 2022, and the slow demand thereafter, creates a challenge for manufacturers as the facilities that have been established cannot stand idling,’ says Martin, ‘and the lack of investor confidence could result in manufacturers moving their operations to countries with more stable policy environments.”
The long-term implications of investor flight is that the next wave of South Africa’s industrialisation will be stalled, according to SAPVIA acting CEO Mike Levington. Investment in renewable energy can stimulate significant industrial growth and provide alternative and new employment and business opportunities that can replace the coal value chain.
The DoE has about six months in which to respond to the comments currently coming in from the public on this draft IRP, and then finalise the plan. The renewable energy sector here is using this opportunity to call on the minister to rework the plan to increase the percentage of wind and solar energy in the energy mix, and create a predictable, stable energy policy environment to stimulate local investment in manufacturing and associated industries.
This article was originally published on the Energy Transition website.
- South African Renewable Energy Council (SAREC), 06 February 2017[Feature Article]Read more
The West Coast town of Hopefield needs social services, improved schooling, and enterprise development. As part of its social responsibility commitments, a nearby wind farm is directing some of its revenue to plugging the holes in the local education system. By Leonie Joubert.
If Marco ‘Bokkie’ Maarman could have, he’d have studied to become a marine biologist. He’s always loved fish, he says; always been fascinated by ‘life under the sea’. He floats a flat hand in front of his face, mimicking a rolling ocean surface.
‘It must have been my father’s influence,’ the 37-year-old smiles.
For years, his father worked the galley on fishing boats that headed out into the chilly Atlantic, typically in search of anchovy, or snoek, or hake, and cooked for the crew. He’d be gone for one, two, sometimes three months at a time, between short spells back home in the West Coast town of Hopefield, about 130km north of Cape Town. He remembers many forlorn Christmases when his father wasn’t home.
Now, his father is elderly and retired, and the two live together in a small state-built house on the outskirts of town, with one of his sisters and a nephew.
Maarman went to junior school here in Hopefield, and then travelled to nearby Vredenburg about 34 km away to finish high school. But like many school leavers from his neighbourhood, there wasn’t much money to study further. And so, either through luck or happenstance, he became a tradesman: first, working as a welder on the fishing boats down on the coast; then he learned carpentry under his brother’s tutelage.
This bottleneck in the town’s schooling system is one of the needs that a local development initiative is trying to free up, and it’s linked to the Hopefield Wind Farm which, since December 2014, has had 37 turbines turning their blades in the face of the onshore wind, and feeding power into the national grid.
Green energy, local development
In 2011, the South African Department of Energy (DoE) started a process of commissioning private energy firms to build and run a series of 96 renewable energy plants across the country, mostly wind and solar plants, but also some biomass, landfill, and small hydro plants.
As part of each company’s agreement with the state, a percentage of the revenue generated from selling electricity to the national utility, Eskom, must go towards social and enterprise development in communities within 50km of each plant.
The Hopefield Wind Farm, owned by Cape Town-based Umoya Energy and run by Danish turbine manufacturer Vestas, was one of the first plants to be built as part of the Renewable Energy Independent Power Producer Procurement (REIPPP) programme. When Umoya’s development team met with communities in Hopefield, it found that in addition to support for basic services - such as health and community social services - the town’s education system needed an injection of aid.
‘There’s only one primary school and one high school here in town,’ says Umoya Energy’s Elton Gordon, senior project manager in its community operations department. Many pupils still travel to Vredenburg to attend high school, just as Maarman did twenty years ago.
When Umoya asked the local schools what support they needed, they found that Hopefield Primary School’s fourth grade class was overcrowded. So Umoya offered to fund the cost of an extra Grade 4 teacher, along with a teaching assistant.
The next initiative is a bursary scheme for school leavers - those who, like Maarman, might want to study at a tertiary level, but don’t have the funds.
‘We have four people on bursaries at the moment,’ says Gordon. ‘They’re studying in the areas of engineering, food science, and education.’
Then there’s the enterprise development side of things. One element of a home improvement project here in town, run by Umoya Energy, is to train up local artisans - electricians, plumbers, and carpenters - to help with retrofitting low-cost houses with ceilings, solar water heaters, additional electrical points, and low-energy lightbulbs. Maarman was one of the recruits for this programme, and after two years of working as an employee on the project, is now being trained up to operate as a contractor. Over the next three years, with the help of a mentor, he’ll learn the basics of running a business: managing finances, ordering from suppliers, hiring and paying staff, and invoicing for work done.
Maarman laughs when he remembers his first attempts at carpentry as a teenager.
‘I didn’t really like woodwork at school,’ he says. He remembers not being that good with his hands. But years of learning at his brother’s side changed that. And now he’s starting a whole new chapter, contracting to the firm that is training him to be his own boss.
- South African Renewable Energy Council (SAREC), 06 February 2017[Feature Article]Read more
When the turbines of the Hopefield Wind Farm first started spinning in December 2014, a percentage of the revenue earned from feeding power into South Africa’s electricity grid was immediately channeled towards injecting life into the town’s sluggish economy, and investing in bettering the lives of people in the local community. By Leonie Joubert.
Marco ‘Bokkie’ Maarman points to an imaginary line just beneath where the kitchen wall in Gaynor Papier’s two-bedroomed home meets the corrugated asbestos roof sheets.
‘Just there,’ he says, ‘that’s where I’ll put the ceiling.’
First, the carpenter will attach thin pine planks to the walls, before suspending the light-weight compressed foam ceiling boards from the roof beams. Then he’ll neaten off the edges with a foam cornice. The ceiling will be blindingly white against the slightly aged walls, but a lick of the right varnish, and they’ll have a convincing knotty pine finish, says Maarman.
Aesthetics, though, are secondary. What Papier and her family need is a bulkhead between themselves and the elements, because with only a thin roof sheet on their house, the place turns into an oven during summer. Wintertime, when the rains come, these houses are damp and cold. A ceiling can take the edge off these extremes, making the place more comfortable to live in, but also reducing the health hazards of cooking or heating with open flame and paraffin. It also cuts energy costs dramatically, both for cooking, heating water, or warming a room.
Maarman reckons he’ll be able to get cracking on the job in Papier’s house in a week or so, once his materials arrive from the suppliers. After two years of working as a hired carpenter on a project to ‘retrofit’ low-cost houses like this with ceilings, this will be the second home he will do in his new capacity as an independent contractor in the small Western Cape town of Hopefield.
Papier’s home is in White City, a neighbourhood on the edge of Hopefield. Her suburb has no pretensions of being a metropolis, but the few rows of dinky cement-block houses are whitewashed to neaten their raw, unplastered walls.
Like many of the state-built low-cost housing schemes around the country, the houses here in Olienhout Street are all cut from the same cloth: two small bedrooms, a bathroom, and the front door opening directly into a tiny kitchen. Many have a basic water point and drain, and are connected to the grid, but few have a water-heating geyser. Tight state budgets meant cutting ‘frills’ like ceilings and hot water systems.
State partners with private energy sector
Two years into operation, the Hopefield Wind Farm was one of the first to go up as part of the South African Department of Energy’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme, an initiative that started in 2011 and has outsourced some of its new electricity generation capacity to private energy companies. The programme will see a series of 96 different plants - concentrated solar power, PV, biomass, landfill, wind, and small hydro - constructed around the country, feeding greener electricity directly into the national grid.
Part of the agreement between the state and all the private energy firms is that, for the first 20 years of operations, the power plants will set aside a percentage of the revenue earned from selling electricity to the grid, and invest it in communities living within 50km of the plant.
The Hopefield farm is a 67 MW capacity plant a few kilometres outside of town, with 37 turbines owned by Umoya Energy. Since the farm’s blades first started turning in December 2014, Umoya’s development funds have gone towards four initiatives: the Hopefield Home Improvement Project (HIP); a conservation initiative where they have set aside some Umoya-owned land adjacent to the plant for conservation, and are paying local contractors to clear alien invasive plants; the funding of a teaching post at the local primary school, along with a teacher’s assistant; and a bursary scheme for school leavers wanting to make their way into tertiary studies.
The HIP was modelled on a housing upgrade initiative that was first piloted in the Cape Town suburb of Khayelitsha, about 130km south of here, which has a mix of low-cost state housing and informal structures. Run by the non-governmental organisation SouthSouthNorth, the ‘Kuyasa’ project retrofitted low-cost state-built houses with ceilings so that houses could be insulated and more thermally efficient and comfortable. They installed solar water heating systems, and energy efficient lighting.
On the success of that, Umoya partnered with SouthSouthNorth to run the same kind of home upgrades here in Hopefield. Both Papier and Maarman - the White City resident, and the carpenter - are beneficiaries of this project.
For Papier, the HIP means she gets a basic upgrade to her home - a ceiling, a solar water heater, a few extra plug points, and energy efficient lightbulbs throughout. For Maarman, it means not only a few years of employment as an artisan, it’s also a chance to be equipped to start and run his own business.
Training the ‘tradesmen’
Maarman first heard that something was up when he saw posters around town late in 2014.
Wanted, the adverts said, electricians, plumbers, carpenters. No formal training needed, but experience a plus. Something like that, Maarman recalls. The new arrival in town, Umoya Energy, was looking to hire ‘tradesmen’ from within the community. The self-taught carpenter applied and was amongst 21 people who were recruited by Umoya and sent to a college in Cape Town for a month’s training; 18 of these were then hired by Umoya to work on the HIP. Over two years, their goal was to do the home upgrades on 591 houses in poorer neighbourhoods in Hopefield.
This ‘phase one’ came to an end in November 2016. Then, the next round of training: basic entrepreneurial skills, like how to draw up a budget, manage money, order from suppliers, market one’s business, hire and pay staff, and so on.
Then, ‘phase two’: three of the team were hand-picked to become part of an incubation scheme. One of each - an electrician, a plumber, and a carpenter - was selected to become an independent contractor to the next round of HIP upgrades. This time, 350 houses; and Maarman got the carpentry gig. Now, instead of turning up each day as a salaried employee, he has to run the ceiling installation side of the upgrades himself: he orders the stock, hires the assistants, invoices Umoya for the number of houses done each month; and pays his team and his suppliers.
When Maarman knocks on Joyce Cleophas’ door, two houses down from Papier’s, she’s not expecting visitors, but happily lets the carpenter in so he can show off his handy work. In the second week of January 2017, Maarman and the HIP crew did the retrofitting work on this house. This was the very first house to get an upgrade as part of the second phase of the project. And it was his first gig as a contractor on Umoya’s enterprise incubator scheme.
He’s still learning the ropes of how to run his own business, but Maarman has a mentor on speed dial on his phone, and three years in which to learn. And next week, once the suppliers deliver more materials, he’ll get started on Papier’s house.
- South African Renewable Energy Council (SAREC), 06 February 2017[Feature Article]Read more
South Africa’s fledgling wind turbine service technician training programme will be ‘skilling its graduates for unemployment’ if construction on the next round of state-commissioned wind farms doesn’t begin within the forthcoming year.
This is the warning from Naim Rassool, director of the South African Renewable Energy Technology Centre (SARETEC) at the Cape Peninsula University of Technology in Cape Town.
Rassool says the domestic job market for wind turbine service technicians will soon become saturated, leaving graduates unable to find employment locally. It will also jeopardise the future of this training centre, one of only ‘five or six globally’ that has a 2.5 megawatt (MW) wind turbine housing and associated components, supplied by manufacturer Nordex Wind Power, on site for training purposes.
SARETEC was set up by the Department of Higher Education and Training in 2012, in response to the anticipated growth in the renewable energy sector here. The first intake of wind technician trainees was in February 2016. To date, 30 graduates have passed through the five-month training programme at SARETEC, and gone on to complete another two months of practical work in the field. All of these graduates have been absorbed by the domestic industry.
‘The most recent 15 graduates were fully sponsored by Nordex, which speaks to the commitment of the industry,’ says Rassool.
The wind power sector is expected to boom, possibly mirroring its growth in the US market, where this specialist wind turbine service technician job is the ‘fastest growing occupation’, according to the US Bureau of Labor Statistics. This anticipated domestic growth follows the implementation of the Department of Energy’s (DoE) Renewable Energy Independent Power Producer Procurement (REIPPP) programme in 2011, when the DoE began commissioning private energy firms to build and operate 96 renewable energy plants around the country. Half of these plants - mostly using solar and wind energy technologies - have already been built and are fully operational, feeding energy into the national grid.
Wind farms generate the greater number of operational jobs, says Rassool, since the turbines have so many working parts and need maintenance and repair work. Solar plants tend to generate more jobs during the construction phase, as photovoltaic panels need to be assembled; but once operational, plants do not require a large team to keep them running.
‘The wind farms have a contractual obligation (to the national power utility, Eskom), to remain operational 95 per cent of the time,’ explains Rassool, leaving little ‘down time’ for work on of the units.
Each wind farm must have at least two technicians on site, with one technician for every three turbines, at any given time, to ensure that immediate repairs can be done, as well as the regular maintenance work. For safety reasons, there always have to be a minimum of two technicians present when working on a tower.
But while about half of the plants that have been commissioned by the state as part of the REIPPP programme since 2011 are now operational, construction on the next batch of 26 plants, including solar and wind sites, is on hold. This is owing to delays by Eskom to sign the contracts that will set the price at which it will buy electricity from these plants. Until these contracts are signed, private firms cannot begin construction of the sites.
Signing of these ‘power purchase agreements’ (PPAs) has been delayed by Eskom for almost two years now, prompting the private sector to consider challenging Eskom in the courts.
Rassool says these construction delays threaten skills development in the sector, as well as the future of SARETEC, which has been funded by the state to the tune of R105 million between 2012 and the end of 2017. Meanwhile, the private sector has injected further funding in excess of R30 million into the centre.
The next round of wind turbine service technicians begin their SARETEC training this February, as well as the first recruits for the solar photovoltaic technicians’ course.
These wind farms are owned by private energy firms (‘IPPs’ or independent power producers). Some of these IPPs run the farms themselves, but in some cases, the foreign companies which supply the technology are contracted to run the farms and manage the turbines for the first five to seven years which span the warranty period of the turbines. Once this period expires, they hand the operations side over to the IPP.
For instance, the Hopefield Wind Farm, about 130km north of Cape Town, is owned by Cape Town-based Umoya Energy, and is operated by Danish wind turbine manufacture Vestas.
Many of the ‘original equipment manufacturers’ - ‘OEMs’ like Nordex-Acciona and Vestas - which supply farms with their equipment, are hiring SARETEC graduates, according to Rassool. But once the warranty expires on the turbines, and the IPPs take over operation of the plants, the IPPs will be the main recruiters of technicians.
Rassool says the industry is anxious that the two-year delays in signing of contracts with the next round of developers will cause the wind sector’s job market to become saturated, and local wind farms will not be able to employ graduates from courses run in 2018 and onwards.
- South African Renewable Energy Council (SAREC), 18 January 2017[Feature Article]Read more
Senior counsel at Webber Wentzel has issued a legal opinion letter, which states that preferred bidders in the latter rounds of South Africa’s Renewable Energy IPP Procurement programme (REIPPP) are entitled to approach a court to enforce Eskom’s signature of Power Purchase Agreements (PPAs). “In our opinion Eskom cannot sidestep the binding determination of the Minister; they are bound by the Ministerial determination, which includes signing the power purchase agreements,” stated Advocate David Unterhalter, Senior Counsel at Webber Wentzel.
Unterhalter continued saying, “As an origin of state, Eskom, cannot raise the reservation of rights in the request for proposals (RFPs) to defeat a claim for substitutionary relief. Nor, can it refuse to conclude a power purchase agreement.”
Representing the thirty seven independent power producers affected by PPA signature delay, legal opinion was sought out by the South African Renewable Energy Council (SAREC) regarding the current power purchase impasse with Eskom. “We are pleased that the legal counsel is so very clear in its opinion that Eskom has no such prerogative. This assures us of the strength of our legal position” said Brenda Martin, Chair of the South African Renewable Energy Council.
Foreign investment at risk
Local and foreign investors have responded very positively to the REIPPP to date, partly because the rules have been clear and applied fairly and consistently. The programme has secured nearly R200 billion in new investment. Tampering with the rules at this stage can only damage confidence in both the programme and the country. SAREC has therefore come out strongly against Eskom’s attempt to bargain down the cost of energy after agreements are already in place, as it is a sure-fire route towards destroying investor confidence and sabotaging South Africa’s economic interests.
Legal opinion on this, also confirms that Ministerial determinations are binding on Eskom and that the utility has no discretion to impose further conditions on preferred bidders. What’s more, Eskom certainly has no legal authority to negotiate tariffs with already selected bidders,” said Martin.
In conclusion, SAREC is calling on Eskom to comply with the law and act in the national interest. “We will continue to engage through talking with Eskom and government stakeholders, but it is reassuring to know that the legal opinion is very clear. Were we to go to court, we would be likely to get an enforcement order that Eskom should sign all outstanding power purchase agreements,” added Martin.
The legal opinion in PDF format can be downloaded at this link.
- South African Renewable Energy Council (SAREC), 30 November 2016[Feature Article]Read more
Whilst the South African Renewable Energy Council (SAREC) has welcomed the 2016 update of the Integrated Energy Plan (IEP) and Integrated Resource Plan (IRP), it is advocating that the public participation process addresses a number of concerns that the industry has raised.
SAREC, the umbrella body that represents the interests of the solar and wind industries, has come out in cautious support of the recently released 2016 update of the IEP and IRP, which for the first time since 2010, allows all stakeholders to participate in an informed debate on the choices and timings of the technology choices that will enable the delivery of affordable and sustainable energy to South Africa. “In terms of the Department of Energy’s activity plan, such debate should culminate in the promulgation of a final IRP shortly after March 2017,” said Brenda Martin, Chair of the South African Renewable Energy Council.
SAREC acknowledges that wind and solar PV technologies will continue to play a significant role in the country’s future energy path, however, the industry body intends to encourage broad stakeholder groups to make use of the opportunity and process available to address certain issues. For example, “It isn’t clear as to why constraints imposed on renewable technologies in the IRP 2010 is continuing to be maintained in the 2016 update, considering that the track record of renewable power prices awarded in Rounds 1 to Rounds 4 of REIPPP, illustrates a clear decline, even faster than those anticipated back in 2010.”
SAREC acknowledges that wind and solar PV technologies will continue to play a significant role in the country’s future energy path, however, the industry body intends to encourage broad stakeholder groups to make use of the opportunity and process available to address certain issues. For example, “it isn’t clear as to why constraints imposed on renewable technologies in the IRP 2010 are continuing to be maintained in the 2016 update, considering that the track record of renewable power prices awarded in Rounds 1 to Rounds 4 of REIPPP illustrates a clear decline, even faster than those anticipated back in 2010,” adds Martin.
Other questions that SAREC would like to be processed through the public participation include:
- Whether rational planning and resulting investment choices have been made on the basis of ‘least cost’.
- Whether all opportunities to achieve both energy and developmental objectives are being utilized. The enviable record of deployment and delivery of socioeconomic benefits means that larger allocations of technologies aligned with the achievement of South Africa’s development agenda should be considered.
- Why the wind and solar PV prices used in the IRP base case scenario are at variance to real prices being awarded to preferred bidders in Round 4 of the REIPPP.
- The absence of CSP technology in the IRP base case scenario without any clear explanation.
Finally, the IRP 2016 assumes that all determinations gazetted by the Minister of Energy to-date should proceed as planned over the next 4 years. SAREC would thus like to urgently insist that the DOE ensures due process with the financial close of the Round 4 and small IPP preferred bidder projects and the announcement of Expedited Round preferred bidders.
- Hartmut Winkler, 29 November 2016Read more
The much awaited updated South African Integrated Resource Plan for electricity has been released for comment.
The document makes far-reaching proposals about the target energy generation mix leading all the way to 2050. In particular, the plan pronounces on the future scale and role of nuclear energy and renewable energy technologies. The appropriateness of these has been debated a great deal in the country in the past few years.
If adopted in its current form, it will lead to a 15 year delay in the construction of new nuclear power plants. But it will also result in a greater reliance on gas, solar and especially wind power than anticipated five years ago in the previous plan 2010-2030.
The proposed plan has already been the subject of intensive scrutiny and debate, with those for and against lining up to make their points. The state utility Eskom is unhappy about the suggested delay in building a much bigger nuclear capability and has even threatened to ignore key recommendations. For their part, advocates of renewable energy argue that the plan underestimates how much less expensive these technologies will be in the next 20 to 30 years.
The previous road-map
An earlier version of the integrated resources plan released in 2011 envisaged that between 2010 and 2030 South Africa’s electricity demand would grow from 255 TWh (tera-watt-hours – a unit of energy) to 436 TWh. This was to be achieved through the completion of two very large coal power plants, Medupi and Kusile, which would supply the bulk of the shortfall. Other contributors would be nuclear, for which new plants would need to be built, and the establishment of a new renewable energy generation network of wind power and solar power.
But a great deal has changed since then.
Firstly, the growth in energy demand has proved to be lower than projected. Secondly, the cost of renewable technologies has dropped faster than expected. In particular, the price of solar photovoltaic electricity allocated under the country’s renewable energy procurement programme fell by 75% between 2012 and 2015.
These developments were captured in an updated version of the 2011 plan that was prepared in 2013. It recommended that, in view of these changing conditions, there was no longer a need to kick-start a nuclear build programme immediately. It also recommended that a decision on whether or not to embark on an expensive expansion of the nuclear reactor fleet could be delayed for several years.
But this updated version of the plan was never promulgated. This left the door open for a fiercely pro-nuclear lobby which is in favour of a highly lucrative nuclear expansion programme. This issue has developed into a political hot potato. The central argument is that the push for nuclear goes against economic common sense and that it’s being pursued for the benefit of politically connected individuals.
The nuclear build issue has come to feature prominently as one of the important drivers of what is referred to as “state capture” of some of the country’s large institutions.
The latest version
The draft update of the resources plan advocates the following most likely scenario, referred to as the “base case”.
- Electricity demand between 310 and 355 TWh in 2030 (about 100 TWh lower than envisaged in the 2010-2030 plan) with demand rising to between 390 and 530 TWh in 2050. This is based on projection models developed at the Council for Scientific and Industrial Research.
- The construction of 37.4 GW (1 000 GigaWatts equal 1 TeraWatt) of wind capacity and 17.6 GW of solar photovoltaic capacity between 2020 and 2050.
- The gradual decommissioning of most existing coal power stations by 2050 in line with international carbon emission agreements.
- A substantial increase (35.3 GW) in electricity generation from gas. Due to the high cost of gas it is generally used only as a back up. It would in any case contribute only about 7% of total energy generation.
- The construction of just over 20 GW of nuclear power. But this would only gradually come on line between 2037 and 2050. Given that construction of the plants would take ten years the decision to go ahead with the nuclear build could still be delayed for another decade.
Unsurprisingly, the nuclear industry and its supporters have reacted very negatively to the new draft. Strong nuclear advocates in the state electricity utility Eskom have gone so far as to defiantly declare that they will invite nuclear construction proposals before the end of the year.
On the other hand advocates of faster growth in renewables have criticised two fundamental assumptions underpinning the “base case” model.
They argue that the model assumes renewable tariffs slightly higher than achieved in the last allocations made under the renewable energy procurement programme. Only by 2030 do these drop a further 20% for photovoltaics and 9% for wind. But given recent trends and projections there’s a strong likelihood that future renewable energy costs will be lower than that.
The “base case” also assumes a limit to how many solar and wind plants can be constructed annually. But based on past interest and delivery by private renewable power producers far greater annual developments are possible.
Several researchers have shown that by applying lower renewable tariffs and removing annual construction limits renewables can make up a much greater proportion of the energy mix, and that new nuclear might not even be needed in 2050.
Future energy demand
The new energy plan is now subject to public input. It is due to be adopted by government in four months time after improvements and further scenario modelling has been added.
Even after adoption, updates will need to be done regularly, ideally every two years since even current projections could be overestimating future energy demand considerably.
This is particularly true given that energy consumption is declining in most developed countries because of advances in technology and energy saving initiatives.
If the energy sector is managed correctly, the current South African energy crisis may not be as far reaching as is often assumed.
- WWF South Africa, 24 November 2016Read more
WWF South Africa welcomes the release of the long-awaited draft Integrated Resource Plan (IRP), and the proposed delay on the nuclear build. However, we echo the sentiment of others that the proposed nuclear build should be taken off the table altogether and more renewable energy should be added into the mix.
It is of concern that on the back of the release of the IRP, state utility Eskom has announced that it will be putting out a Request for Proposals for the proposed nuclear build for submission before the end of 2016.
The draft IRP contains several scenarios which still need to be debated and interrogated through public consultation. For Eskom to pursue a call for proposals at this time, without further consultation and a cabinet-approved IRP in place is both misplaced and premature.
Saliem Fakir, head of WWF-SA’s Policy and Futures Unit, commented: “South Africa has made commitments both internationally and nationally to reduce our carbon emissions, and in order to meet these commitments, we need to install as much clean energy as possible at the most affordable price.
“Nuclear is not the answer. In our view, a unconstrained renewable energy scenario as the base-case would be the most appropriate to meet South Africa’s developmental needs – therefore there should be no cap on this source of energy. The excuse that there is insufficient grid capacity to meet this surge in installations for renewables is true for all other options and part of the plan should be to strengthen the grid to overcome these obstacles.”
- South African Wind Energy Association, 23 November 2016Read more
The wind energy sector has applauded the release of the 2016 update of the Integrated Resource Plan (IRP) and the accompanying public consultation process that will enable all South Africans to engage electricity planners on investment choices – transparently and with a focus on least-cost.
South African Wind Energy Association (SAWEA) CEO, Brenda Martin, welcomed the updated draft of South Africa's long term energy plan, the Integrated Energy Plan (IRP) released by the Department of Energy earlier this week.
“It’s common knowledge that the IRP has been outdated since 2013 and many of us have been feeding into the ongoing consultation process of this policy since 2010. The generous allocation given to wind here will assist with increasing confidence in the market and ensures that we can see a clear picture of how our industry will develop as make the transition toward decarbonisation.”
“The IRP is based on a set of important assumptions which inform model outputs and which in turn determine the country’s electricity investment decision-making to 2030. Two of the most important assumptions from SAWEA’s perspective are demand and renewable energy costs. The assumptions made on these have a direct bearing on what the model selects for investment. The IRP2016 update published today clearly takes more recent data related to these assumptions into account, and in addition, extends the planning horizon to 2050,” she continued.
The Wind Industry has extra cause to celebrate as the IRP draft lays out a clear path for significant future expansion, including an allocation 37,400 megawatts for wind energy development by 2050.
The 2013 update has still not made it into policy but it is hoped that the latest 2016 update will be realised within the timeframes put forward by the department with promulgation shortly after March 2017.
Between Rounds 1 and 4 of the Renewable Energy Independent Power Producer’s Procurement Programme (REIPPPP) the cost of wind and solar energy has fallen drastically. It is now unequivocally the cheapest, fastest form of new build energy in South Africa. Both wind and solar are now averaging R0.62 per Kilowatt Hour (kwh) having fallen from R1.15 per kwh and R3.65 per kwh respectively in Round 1. This price is significantly lower than the tariff prices for coal from Independent Power Producers (R1.03 per kwh), Eskom coal (R1.05 per kwh to R1.16 per kwh) and nuclear power which is estimated at between R1.17 to R1.30 per kwh.
Other notable elements of the update include:
- Within Base Case observations the system only commissions new capacity in 2022, with this capacity coming from a combination of wind, solar photovoltaic and gas.
- New nuclear is only commissioned by 2037 (effectively 2 Units or 1.36 GW) with 20.4 GW added by 2050. Previously, the plan had been to add 9.6 GW of nuclear between 2023 and 2029.
- As well as 37.4 GW of wind, 17.6 GW solar PV has been allocated in the draft – these are additional to the existing allocation of 13 GW of renewable energy by 2025, through the Renewable Energy Independent Power Producer’s Procurement Programme.
- 35.2 GW of gas has also been allocated in the new draft.
- The extended allocations are envisioned by 2050, with new build for these technologies commissioned at a steadily growing rate, from 2021.
- As the share of renewable energy technologies in the system grows and coal plants are decommissioned, water consumption and emissions both decrease.
“We urge South Africans to engage with the IRP public consultation process so that there can be little doubt as to the public priority placed on rational, transparent electricity planning and due process and so that the IRP2016 can be sure to be adopted as policy before June 2017,” concluded Martin.
The South African Wind Energy Association is a non-profit, industry organisation representing the wind industry in South Africa. Its members include both national and international entities active in the entire wind energy supply chain. Its aim is to promote the sustainable use of commercial wind energy in South Africa; to contribute knowledge and human resources to the streamlining of the policy and regulatory framework for wind in SA; to facilitate synergy between the growth of the industry and the achievement of the broader socio-economic aims of Government (including training, job creation and localisation); to disseminate information; to act as a focal point for discussion between members, government, the media and the public. Visit SAWEA on the web: www.sawea.org.za
- “Public participation is crucial to progressing South Africa’s electricity plan” says Faith CommunitiesHeinrich Böll Foundation & SAFCEI, 23 November 2016Read more
Yesterday, South Africans got their first glimpse at the Department of Energy’s (DoE) proposed electricity plans. The proposals suggested in the plan came as no surprise to the Southern African Faith Communities’ Environmental Institute (SAFCEI) and Earthlife Africa Johannesburg (ELA-JHB), who eagerly await their day in court (13 and 14 December) to oppose the SA government’s unconstitutional approach to the country’s energy planning.
SAFCEI spokesperson, Liz McDaid says that while she has a number of issues with the ‘weak and unambitious’ plan itself, the most urgent matter is government’s proposed timeframe and plans for public input. The DoE proposes to hold consultative workshops with South Africans in major cities over a short seven days (7 – 15 December), in which time they would be expected to review and consider the plan and all related information.
“This move clearly demonstrates government’s attempt to deliberately limit public input. It hardly seems fair that the DoE expects the public to fully review all the facts and formulate informed responses in a rush at the end of the year, especially since it took government about 5 years to come up with the plan in the first place,” she adds.
Another major concern from yesterday’s announcement was Eskom’s apparent determination to go outside the proposed DoE’s electricity plan and focus on nuclear, which, if they get the go-ahead, they aim to roll-out in the relatively near future. This is particularly disturbing, since the Public Protector’s State Capture report clearly implicates the parastatal.
“This is why comprehensive and meaningful public participation must be sought. Citizens need to know and fully understand what they are signing themselves and their legacies up for. It is equally important that citizens are educated on renewable energy resources that would work much better for SA than nuclear,” says McDaid.
“We urge members of the public to actively get involved in planning SA’s energy future. It is our right to be involved, especially when biased and corrupt decision-making could detrimentally affect SA for many generations to come,” she adds.
McDaid encourages the public to attend the Energy Portfolio Committee meeting on 29 November, which initially was planned as a closed meeting
This meeting coincides with a Civil Society Speak Out hearing, to be hosted by SAFCEI and ELA-JHB, and with the support of the Heinrich Böll Foundation (HBS). After hearing from experts and affected parties about the desirability of nuclear and other energy, a number of concerned citizens will work together to formulate the People’s Statement of the key points of discontent regarding the SA energy plan and the nuclear deal. The People’s Statement will then be handed over to Parliament at 12h00 on Wednesday, 30 November.
In another attempt to mobilise the public, SAFCEI holds weekly Wednesday vigils from 7-9am in front of Parliament in Cape Town to create widespread awareness of the significance of the nuclear deal, and its implications for the SA citizen and to encourage public participation.
Further to this and to publicly oppose government’s energy planning process, a special event will be held outside Parliament on 30 November (from 12h00 – 13h15) to hand over the People’s Statement on nuclear energy. Other solidarity events will be held in Durban outside Eskom, and in Pretoria outside the Dept of Energy.
“With our court case against government, we fight for the freedom and the right to discuss SA’s energy future together as citizens of this country. What we are fighting against are secret meetings about high-stakes nuclear deals and energy plans that reek of corruption. South Africans need to make their voices heard and their presence felt. It is our business, and we should be free to poke our noses in” says McDaid.
“It doesn’t matter who you are, as a citizen you have a right to have your needs considered. This is why we call upon all citizens to Speak Out On The Nuclear Deal and to show your support for our ongoing court action, scheduled for 13 and 14 December at the Cape High Court, against the government ” McDaid said.
Many economists have forecast that the proposed nuclear deal, which could cost upwards of R1 trillion, will bankrupt the country, putting SA way over its head in international debt. There will also be many associated costs to the country - for the mining damage and destruction of water and air and livelihoods in the Karoo, the cost of contingency funds that will be needed for any nuclear problems or accidents, and the enormous costs of nuclear decommissioning, which have yet to be quantified. More broadly, there are the costs related to government’s responsibility to provide for the citizens, such as infrastructure, and education and healthcare for all, all of which would play second fiddle to the burden of debt. None of these costs have been accounted for in deciding to take the nuclear road.
Should members of the public wish to attend the Energy committee meeting which is scheduled for 29 November, come with your SA identity document and plan to arrive at least an hour before the meeting to make time for processing at Parliament’s secure entrance.
SAFCEI and ELA-JHB also need public support to raise the funds to continue to pursue this case. To donate toward this very valuable and public interest cause, go to www.safcei.org.
- South African Photovoltaic Industry Association, 22 November 2016Read more
The South African Photovoltaic Industry Association (SAPVIA) welcomes the release of the 2016 update of the long-awaited Integrated Resource Plan (IRP). The updated IRP will give all South Africans the opportunity to interrogate the choices and cost assumptions used by the IRP planners to reach their conclusions regarding technology choices.
The allocation of 17 600 MW for Solar PV in the 2016 IRP update is a step in the right direction, but falls short of the immense potential South Africa has to offer in this sector. Independent modelling, based on up-to-date figures from South Africa’s REIPPPP bidding rounds confirm that renewables are the best policy choice in order to meet South Africa’s energy needs at the least cost, while still maintaining our carbon obligations.
Evidence shows that the least cost path for South Africa to achieve a sustainable, low carbon, high job creating energy mix is one that contains a large renewable energy component, supplemented with gas fire power. This renewables and gas scenario has been repeatedly seen in our BRICS partners and elsewhere globally.
In the current fiscally constrained environment, SAPVIA believes that the additional cost of deviation from this ‘least cost scenario’ should be made public to allow policy makers to make informed value-for-money decisions. Any additional cost to the South African fiscus that will impact on critical social spending programmes should be debated.
SAPVIA believes that the ‘build constraint’ placed on renewables should be removed in the IRP models and scenarios in order to reflect the real potential that solar technology can play, and will examine the rationale for the current artificial cost-ineffective constraints being placed in the IRP models as it prepares its submission for the consultative process.
It is important that the energy debate is one based on facts rather than assumptions and SAPVIA intends to robustly participate in the public participation process.
- Wind energy conference leaves industry with a clear pathway toward achieving a greater share of renewables for South AfricaSouth African Wind Energy Association (SAWEA), 10 November 2016Read more
One of the predominant themes of Windaba 2016, Africa’s leading wind energy event held earlier this week in Cape Town, was what it would take to successfully achieve the energy transition needed to achieve South Africa’s commitment to the Paris Cop 21 agreement which was ratified this week.
“While we are aware of the challenges of necessary energy transition away from fossil fuel dependence, Windaba has provided many comparable examples of global experience of achieving decarbonisation without compromising economic growth, human wellbeing, or environmental sustainability,” said South African Wind Energy Association’s (SAWEA) incoming CEO Brenda Martin.
“This forum has once again offered industry members the opportunity to share best practice and to regain a shared vision for South Africa’s renewable power potential. While Eskom’s recent refusal to sign Round 4 bid winners’ Power Purchase Agreements has been perplexing to the sector, we are confident that Eskom will soon honour their legal obligations,” added Martin
During the event, SAWEA’s chair, Mark Pickering, highlighted that South Africa’s wind industry currently has R58 billion worth of projects fully funded and ready to contribute to national power supply, once power purchase agreements are signed.
At the event, the Council for Scientific and Industrial Research’s (CSIR) Dr. Tobias Bischof-Niemz demonstrated a realistic picture of how South Africa could achieve 70% renewables by 2040, saving R90 billion per year compared to the business as usual scenario.
“The CSIR study suggests that it is conceivable that South Africa could achieve a significantly larger share of renewables by 2050, without compromising energy security. With recent events related to the REIPPPP, we have experienced some policy uncertainty which has directly impacted on communities waiting to realise economic benefits. But we are sure that the many jobs created, the manufacturing capacity and capital investments realised, the power produced and socio-economic benefits achieved by the REIPPPP in just 3 bid rounds, will not prove to have been short-lived. The South African Wind industry is deeply committed to achieving national long term energy security and socio-economic development. It is critical that momentum is not lost and that lessons learned thus far are built upon rather than squandered” stated Martin.
Seventy leading wind and renewable energy sector speakers participated in the event. They covered a broad range of wind and renewable energy-related themes, from policy to development to technical issues of renewable power supply under the over-arching theme - ‘Towards 100% renewables.’
- South African Wind Energy Association (SAWEA), 03 November 2016Read more
WindAc Africa, the first academic wind energy conference on the African continent, was concluded in Cape Town earlier this week. The two-day conference offered a forum for academics and researchers to share the latest data and intelligence on the finer technicalities of the wind energy industry.
The event also offered a unique learning opportunity for 30 carefully selected university students through a sponsorship programme, allowing them access to the conference, a site visit to Biotherm Energy’s Dassiesklip Wind Farm and a question and answer session with Dr Phil Mjwara, Director General of the Government’s Department of Science and Technology.
Haltor Mataifa, a research student from Cape Peninsula University of Technology (CPUT), has found the experience invaluable: “I have been researching renewable energy for some time now, but this is the first academic event focussed on wind energy that I have attended. I’ve found it very enriching and it has given me a wider perspective which will contribute to my research output. More events like this are needed to prevent the academic element of wind energy lagging behind the rest of the industry.”
The event, which was organised by the South African Wind Energy Association (SAWEA) in partnership with the Global Wind Energy Council (GWEC) was full-to-capacity with 120 delegates, 30 speakers and 30 students. Speakers at the event offered an international flavour with participants from the USA, Germany, Denmark and France as well as contributions from South African academics.
“WindAc is an exciting new addition to the growing series of institutions that accompany the success of South Africa’s Renewable Energy Independent Power Producer’s Procurement Programme. I trust that this first gathering will help to foster the research and study necessary to maximize South Africans’ input to their growing renewable energy industry,” comments Steve Sawyer, Secretary General, GWEC.
Sessions covered a diverse range of such subjects including lessons learnt on community consultation and how renewable energy development can implement changes, knowledge sharing around wind resource and characteristics, the design and planning of electric systems with high penetration of wind energy and research activities on the policy and institutional approaches to deployment of wind energy.
Key sponsors of the event included the South African National Energy Development Institute (SANEDI) through its Renewable Energy Centre of Research and Development (RECORD) and Germany’s GIZ. The event afforded these stakeholders an opportunity to launch the ‘The State of Wind Energy Research in South Africa’, which included a presentation of the study results and a panel discussion on the gaps in wind energy research and how they can be addressed.
Dr Deborah Lew from GE Energy Consulting won the award for best presentation for her subject ‘Integrating Wind into Coal-dominated Power Systems’. Before she joined GE she spent 16 years with the National Energy Laboratory (NREL).
WindAc Africa is part of Wind Energy Week which also includes the 6th annual wind industry conference ‘Windaba 2016’ and an Industry Gives Back outreach day with the community of Atlantis.
- South African Wind Energy Association, 17 October 2016Read more
The South African Wind Energy Association (SAWEA) has lodged an official complaint with the National Energy Regulator of South Africa (NERSA) over Eskom’s failure to comply with ministerial determinations. The complaint relates to Eskom’s public refusal to enter into power purchase agreements with Preferred Bidders arising from government’s Renewable Energy Independent Power Produce Procurement Programme. In the event that Eskom is found guilty, SAWEA has requested that NERSA impose the maximum legislated penalty of 10 per cent of Eskom’s annual daily turnover for each day that Eskom continues to delay the programme.
“SAWEA believes that Eskom is acting in direct contravention with Government’s policy to diversify the country’s energy mix” said Johan van den Berg, CEO of the South African Wind Energy Association. The complaint details Eskom’s refusal to comply with the Electricity Regulation Act, ministerial determinations and Eskom’s own transmission licence conditions. “Eskom’s current stance is incompatible with government policy, the law of the land, and its own licence conditions.” added van den Berg.
SAWEA members are deeply concerned by Eskom’s stance. The industry believes that Eskom, which is by far the largest generator in the country, is abusing its position as the operator of the national grid in order to favour its own investment in new power plants.
Unease over Eskom’s motives leads SAWEA to believe that the state-owned utility is pushing its own agenda and opposing government’s energy policy. SAWEA considers recent statements issued by Eskom to be misleading and not in the best interest of the country.
Decisions on new power generation are the sole preserve of the Minister of Energy who has issued a series of determinations designed to stimulate competition, diversify the energy mix, and reduce the country’s carbon emissions. Since 2011, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has awarded 6 590 MW of renewable energy capacity to 102 independent power producers, of which at least 44 are already operational. In all the programme will attract new private sector investment worth R194 billion in predominantly rural areas.
Successive capacity bidding rounds have seen tariffs fall to the point that renewables are now the cheapest form of electricity generation available to the country. Independent research by the CSIR has confirmed that wind and solar PV energy are, without a doubt, the lowest cost generation option for South Africa’s future.
The REIPPPP will also lead to significant investments in social development in the communities surrounding these projects. Approximately R19.3 billion will be ploughed into social development and a further R6 billion will go into enterprise development over the twenty year lives of the projects. Local communities will earn a further R29.2 billion through their direct shareholding in the projects.
The REIPPPP is also stimulating local manufacturing and creating sustainable jobs. By March 2016 over R30 billion had been spent on local content and a further R65.7 billion is expected to be spent by projects that have yet to commence construction. Twelve new industrial facilities have been established as a direct result of the programme. Since 2013, the construction and operation of renewable energy projects has already created 111,835 job years for South African citizens.
Cabinet recently recognised these accounts when it issued a statement reaffirming support for the REIPPPP. The office of the President has further stated that ‘all the Independent Power Producer Programmes, and any other determinations made by the Minister of Energy, are and remain government policy and are supported by the Presidency’.
“Given these facts, Eskom’s refusal to sign any further power purchase agreements with renewable energy producers is quite inexplicable and clearly falls foul of the law,” concluded van den Berg.
More Information about SAWEA
The South African Wind Energy Association (SAWEA) is the not-for- profit, industry organisation representing the wind industry in South Africa. Members include both national and international entities active in the entire wind energy supply chain. SAWEA aims to promote the sustainable use of commercial wind energy in South Africa; to contribute knowledge and human resources to the streamlining of the policy and regulatory framework for wind in South Africa; facilitate synergy between the growth of the industry and the achievement of the broader socio-economic aims of Government (including training, job creation and localisation); disseminate information; and to act as a focal point for discussion between members, government, the media and the public.
- Biotherm Energy, 21 September 2016[Corporate PR] Leading African IPP, BioTherm Energy has emerged victorious in the recent 20MW solar tender in Ghana, West Africa. The company was selected as the preferred supplier out of the numerous bids submitted and will build, own and operate the facility on a 20 year PPA basis.Read more
This ground breaking project will be one of the first of its kind at a utility scale for Ghana and paves the way for future developments in the renewable power sector. This facility will generate enough clean power to support over 10 000 homes, adding much needed power to the Ghana grid where power interruptions are frequent and will provide jobs for members of the local community. These planned activities will advance BioTherm Energy's commitment to Power Africa's goal of providing access to clean, reliable energy across sub-Saharan Africa.
In an interview, CEO Jasandra Nyker explained that “as a company, BioTherm Energy is growing from strength to strength and this latest award is a significant milestone achievement. We are committed to producing clean and sustainable power at competitive pricing, ensuring benefit for local communities, and look forward to concluding the necessary agreements with the Government to take this project into construction.”
Recently, BioTherm also secured 34MW of solar projects in Burkina Faso, 284MW of wind and solar in South Africa as well as being shortlisted in numerous countries across the African continent. In addition, it has embarked on a greenfield development program and is engaging with several African governments in this regard.
- South African Photovoltaic Industry Association, 31 August 2016Read more
The credibility of the renewable energy independent power producers (REIPPP) program which has received international acclaim is being threatened by ongoing delays within government departments. The delays are directly affecting the viability of projects in an advanced stage of development and are turning away foreign investors and causing the shutdown of local manufacturing plants, resulting in the loss of hundreds of jobs and potentially thousands more.
This comes at a time when employment is a vital factor in lifting South Africa’s economic growth rate which is projected to be marginally above 0% this year.
The three areas of the REIPP programme being affected are round 4 projects in preferred bidder status, the expedited round where projects are awaiting announcements on whether they've achieved preferred bidder status and projects in the small projects procurement programme awaiting financial close.
In all these cases the private sector has outlaid significant capital to bring the projects to advanced stages of permitting, licensing and design but the government has missed several key deadlines to execute the required agreements or make announcements. The dates were originally communicated to the industry by the IPP Office on behalf of the Department of Energy. Although the IPP program adjusts the tariff by inflation annually, delays impose costs for projects and other industry players for which there is no compensation. Project developers, manufacturers and financiers are all affected.
For projects and developers, the added burden is made up of salaries for the development staff, increased legal fees, interest on the capital already spent to date and upward movements in project construction and supply costs where quotations have expired. These costs create problems especially for smaller projects where salaries and legal fees make up a larger portion of the total project costs.
The delays make planning very difficult for SAPVIA's members and SAPVIA is concerned that this may result in projects being abandoned. Projects in preferred bidder status have spent up to R15m on securing land, legal fees, bidding and design. Abandoning a project means this money is wasted and thousands of jobs may never materialize. There are currently 49 projects in preferred bidder status, equivalent to 2 254MW. At the current average, based on operational projects, of 11.63 jobs per MW, if Eskom were not to execute the Power Purchase Agreements over 26 000 jobs would not materialize.
Delays are also causing factories to shut down. Equipment manufacturers who have already invested hundreds of millions of Rand setting up factories, have had to incur operational costs with no revenue and no foresight as to when revenue and orders may be generated. Two leading international inverter manufacturers, SMA and AEG that invested in factories in South Africa have closed their doors, one of which cited the “lack of the South African government adhering to communicated timelines” as a reason. At least one solar module manufacturer has also shut up operations within the last three years.
Lenders who provide up to 75% of the funds to build projects as debt are also suffering. Delays cause costs in commitment fees and having to ring fence money that is not deployed builds interest.
The reasons for the delays are not clear, but it appears from sources within the energy sector that the issue lies in Eskom refusing to execute further PPAs even for projects in preferred bidder status. According to one source, Eskom is refusing to spend any money on purchasing independent power despite NERSA’s instruction that a certain proportion of the increases granted to Eskom must be ring-fenced and spent on IPPs.
Eskom was granted a multi-year price determination increase (MYPD3) of 8% per year from 2013-2018; this included provisions of 1.1% on average per year for IPPs. Eskom is not financially burdened by executing power purchase agreements with IPPs because all expenses are seen as a pass through cost. On the contrary, estimates are that in 2015/16 Eskom is collecting R1.6bn more from consumers than what they are paying for power from renewable energy IPPs.
NERSA approval was granted for the Rounds 1-3 of the REIPPP program. Round 4 onwards is to be covered by MYPD4 which is yet to be approved, however an inter-governmental agreement ensures that the pass through of costs will not leave Eskom in a position of risk.
Money from energy sales continues to be collected by Eskom meaning delays in executing PPAs leaves more revenue in Eskom hands.
Despite Eskom’s media statements to the contrary, renewable energy has already brought huge benefits to South Africa. Through the competitive nature of the IPP program and the learning within industry, renewable energy prices are now cheaper than Eskom's average selling price. The IPP Office quoted the average price of all renewables in bid window 4 as being "77c per kWh". Eskom have stated their average selling price is 83c per kWh, and this is likely to increase by more than inflation.
Eskom is correct in stating that the currently contracted IPP projects from Round 1 and 2 are expensive, however this was necessary to attract major energy participants and to create a competitive and stable environment. It would be nonsensical to discontinue the program when South Africa is about to reap the rewards of having invested in the first expensive rounds. Renewable energy IPP projects have already created 24 965 full time equivalent jobs and attracted a total foreign investment of R194.1bn.
It appears as if Eskom is holding up a strategic government initiative to protect its own financial vulnerability and that Eskom’s actions may result in a lost opportunity for thousands of workers.
The Presidency and the Department of Energy have recently confirmed their support for the IPP program. However the ongoing delays, coupled with the recent comments from Eskom’s Chief Executive indicating they would not enter into future power purchase agreements with IPPs, creates uncertainty and casts a shadow over what up to now has been one of government’s most successful public/private sector initiatives to date.
- Sonnedix, 29 July 2016Read more
The 125 hectare, 86MW, Mulilo-Sonnedix-Prieska PV project, in the Northern Cape officially started commercial operation on Friday 22 July, 2016. Construction was completed after only 17 months. Further to developments in Europe, Asia and Americas, the Prieska Solar Plant is Independent Power Producer (IPP) Sonnedix’s first plant in South Africa and the biggest in its fleet.
This milestone project was developed in partnership with Mulilo Renewable Energy and Ixowave Women in Power, and was built for Sonnedix by juwi Renewable Energies (Pty) Ltd, the South African subsidiary of the international juwi group.
The project will be run under the auspices of the Department of Energy and has an expected 20-year lifespan. Sonnedix will manage the ongoing operations with a local team, and will remain fully committed to support the local community and its economic development over the next 20 years.
“We are delighted to announce the completion of the Prieska Solar Plant, our first in South Africa,” Andreas Mustad, Sonnedix’s CEO said. “The project has driven crucial economic activity in the Northern Cape, and will bring renewable power to 40,000 homes across South Africa.”
Farid Moucer, Country Manager of Sonnedix Solar South Africa Holdings (Pty) Ltd, said that the project, which was developed under the Renewable Energy Independent Power Producers (REIPPP) Programme was completed on time and within budget: “The project was completed in due time as per the schedule and is now fully operational – it has been a tremendous team effort and we thank all of our suppliers and stakeholders who ensured that we met our deadlines.”
Torsten Keller, Engineering, Procurement and Construction Manager of the Mulilo Sonnedix Prieska PV Project, says that the 125 hectare site which comprises 275,000 PV modules, connected by 990km of cable, was a complex undertaking: “The logistics were tremendous and we needed reliable partners to ensure that it was executed on time, on budget and in good quality in order to achieve the required performance for the 20-year operation.”
The project has had a significant economic impact on the Northern Cape region in terms of job creation, and on a wider scale has created opportunities for South African RE suppliers.
“We used as many South African suppliers as possible for the project. Most of our large equipment, solar modules, the mounting structures, the inverter station, were procured through a local South African entity. Components were only imported if they were not manufactured in South Africa, and our plant will continue benefiting to the local community for the next 20 years of operation” said Torsten Keller.
“The lifestyle of many people has really changed. Many came with nothing and have learnt skills. This solar project has given the community of the Siyathemba area a lot of hope” said Piet Olyn, project community liaison officer.