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SA needs to scale up renewable energy to help solve crisis
by Daniel Schwab
WITH the recent bidding of Round Four in the South African government’s Renewable Energy Independent Power Producers Procurement Programme, the renewable energy industry can look back at some remarkable achievements over the past few years.
According to a recent Bloomberg New Energy Finance ClimateScope report, SA is ranked third globally behind China and Brazil and first among African countries for clean energy investment.
Unfortunately, the energy crisis that SA is experiencing has put a dark cloud over this “good news” story. As Eskom has recently admitted: “Electricity supply will be highly constrained for at least the next five years, due to drastic deterioration of power stations.”
These two contrasting pictures may lead one to ask what the renewable energy programme is doing to help SA out of these challenging times?
Despite some challenges faced by renewable energy projects, most of them have been delivered on time and with no budget overruns. This is a remarkable achievement considering how young the industry is. According to Eskom, to date more than 600MW have been successfully connected to the grid and are contributing directly to keeping the lights on. If allowed to scale up, renewable energy projects will be in a position to continue delivering thousands of megawatts more quickly than any other solution.
Based on recent studies conducted by Stanford University, the US National Renewable Energy Laboratory (NREL), the International Renewable Energy Association and the International Energy Agency (IEA), renewable energy has been empirically proven to deliver low cost, reliable and carbon-free electricity when managed correctly by the grid operator.
In light of the above and because the stakes are so high, the question of which technologies should be promoted as a solution to SA’s energy crisis has significant consequences for society’s financial and social health. Unfortunately our policy documents and procurement programme implies significant limitations on the development of renewable energy in the country and therefore should be reviewed in light of the latest facts and information.
The current draft Integrated Resource Plan (IRP) for 2010 to 2030 update allows for a 9% share of renewable energy by 2030 or 17GW renewable energy capacity.
This means that more than two thirds of electricity will still come from coal, including 2.5GW new coal capacity projects. Coal emissions alone will exceed the Department of Environmental Affairs’ greenhouse gas emission peak, plateau and decline trajectory target, despite remaining within the Department of Energy’s IRP target. In a low economic growth scenario, renewable energy’s share will fall to just 6% of SA’s electricity.
By comparison, Brazil and Chile have already met or exceeded SA’s targeted renewable energy share for 2030 and China and Turkey will reach 9% within the next three years, if the current renewable energy share growth rates continue. We are therefore lagging behind our peers in both the emerging and developed markets.
It is therefore proposed that government consider increasing allocations within the IRP to secure reliable and affordable energy in the short, medium and long term. By doing so we can achieve the following goals:
- Significant cost savings to the country assuming that by 2030 50% of our energy comes from a mixture of solar photovoltaic, concentrated solar thermal power and wind.
- Improve our foreign currency situation by exporting more of our coal and gas resources rather than burning them at home.
- Create thousands of local jobs and support our local manufacturers, who are more than capable of supplying what is required.
Apart from the above-mentioned benefits, the ability for us to rapidly scale up our renewable energy industry will play a significant role in terms of how SA transforms from a commodity-based economy to a knowledge-based economy.
Countries such as Singapore, South Korea and Ireland have long occupied the top ranks of the World Economic Forum’s Competitiveness Index, while SA has been losing ground, going from 53rd in 2013 to 56th this year, mainly due to the lack of a knowledge-based labour force. Technology-based energy generators such as solar and wind offer the country exactly the type of opportunity to attract high productivity, knowledge-based jobs.
The concern that solar and wind power are not reliable or are intermittent is unfounded. According to NREL and the IEA’s latest report, which investigates the question, a combination of solar and wind offers a feasible solution for delivering reliable and cost-effective electricity.
Some countries already receive a significant amount of their electricity from solar and wind power. Ireland has achieved 50% instantaneous wind penetration with no energy storage. Denmark receives about 20% of its electricity from wind power and Germany has reached 7% wind energy penetration and has produced as much as 22GW of solar power to meet about one third of its energy demand during peak hours.
SA has far more solar energy per square metre than Germany and more than enough available land to place large numbers of solar thermal energy panels with storage to ensure a balanced grid.
Whereas five years ago renewable energy technologies were expensive, current prices can compete with fossil fuels and nuclear power. The most recent bids for solar power came in at seven US cents per kilowatt hour (kWh) and wind at six US cents per kWh, which are now undoubtedly cheaper than coal or gas.
Combine that with concentrated solar power at a soon-to-be-reached cost of below 10 US cents per kWh and you have a blended price that is more than competitive. Add the other benefits of clean electricity and you now have a vastly superior alternative.
SA can benefit much from a rapid integration of renewable energy over the next 10 years. Taking into account that our coal power stations are reaching the end of their lives, it makes excellent economic and social sense to replace them with renewable energy sources. The promise of unending, cheap and reliable energy is our birthright and we have been blessed in this regard. Let’s use it so that we can all enjoy a prosperous and healthy world.
– Schwab is an international energy adviser