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CityPress - - Business -

As coal in­creas­ingly be­comes the pariah fuel of the world, South Africa is look­ing for so­lu­tions to power our econ­omy into the fu­ture, and re­new­able en­ergy could be the an­swer. Just five years ago, the green en­ergy foot­print was mi­nus­cule in the coun­try, but now more than 2 000 megawatts is com­ing from 42 projects that have been in­stalled across South Africa – and there is more to come.

This month, Eskom CEO Brian Molefe said re­new­able en­ergy con­trib­uted a max­i­mum of 1 600MW to the util­ity.

The rea­son for the dif­fer­ence be­tween the in­stalled ca­pac­ity and the max­i­mum pro­duc­tion is that the sun is not al­ways shin­ing and the wind is not al­ways blow­ing, so so­lar and wind plants don’t al­ways pro­duce to max­i­mum ca­pac­ity.

Un­for­tu­nately, how­ever, coal is still king in South Africa, and pro­vides 86% of South Africa’s needs.

De­spite mak­ing big in­roads into clean en­ergy, only about 4.5% of South Africa’s 44 000MW of gen­er­at­ing ca­pac­ity comes from re­new­able sources.

The depart­ment of en­ergy has com­mit­ted South Africa to in­creas­ing re­new­able en­ergy gen­er­a­tion to 13 225MW by 2025 in terms of South Africa’s In­te­grated Re­source Plan.

Part of this plan is to ex­pand the re­new­able pro­cure­ment pro­gramme to gen­er­ate 6 000MW by 2020, and 92 in­de­pen­dent pro­duc­ers have been se­lected for the pro­gramme. Of th­ese, 79 projects have reached fi­nan­cial close and are ei­ther gen­er­at­ing power or are be­ing con­structed.

Eskom’s 100MW Sere wind farm in the Western Cape, which is out­side the Re­new­able En­ergy In­de­pen­dent Power Pro­ducer (IPP) Pro­cure­ment Pro­gramme, is an­other pro­ject that is be­ing used to bump up re­new­ables in South Africa and, last month, Eskom also com­mit­ted to in­creas­ing its green en­ergy with fur­ther re­new­able projects.

Fol­low­ing the his­toric cli­mate change agree­ment signed in Paris at the end of last year, it’s clear that the days are num­bered for coal-fired power plants. The agree­ment, which South Africa signed, forces coun­tries world­wide to switch to a low-car­bon econ­omy to com­bat cli­mate change. If South Africa keeps to the pledge it made, Medupi and Kusile will prob­a­bly be the last coal-fired power sta­tions built in the coun­try. But what comes af­ter coal? The pro­gramme has run five bid­ding rounds to se­lect the IPPs that will gen­er­ate South Africa’s re­new­able en­ergy, but the pro­gramme is not with­out its chal­lenges.

Eskom’s fi­nan­cial woes cast a dark shadow over the pro­gramme. In Oc­to­ber, the cash-strapped util­ity stopped is­su­ing so-called bud­get quotes to IPPs un­til 2018. Bud­get quotes – fi­nal quotes and tech­ni­cal spec­i­fi­ca­tions for the in­fra­struc­ture needed to con­nect en­ergy projects to the Eskom grid – are re­quired for fi­nan­cial close. This has af­fected the win­ning projects in the past two bid rounds, and projects that will gen­er­ate about 2 000MW are now in limbo.

Money­web quoted a let­ter from Eskom stat­ing that Eskom’s “se­ri­ous liq­uid­ity is­sues” made it im­pos­si­ble to com­mit to any of the pro­grammes af­ter bid win­dow three. In the first three rounds of bid­ding, 3 922MW of power ca­pac­ity was bought.

Also, the rand ex­change rate has ham­pered in­ter­na­tional com­pa­nies be­cause they are be­ing paid by Eskom in rands for the elec­tric­ity they de­liver.

South Africa’s en­ergy depart­ment re­leased a re­port last year on the state of re­new­able en­ergy in South Africa, which showed that by June last year, 37 IPPs had al­ready started com­mer­cial op­er­a­tion, adding 1 860MW to the sys­tem.

Since then, the Bokpoort con­cen­trated so­lar plant, lo­cated in Grob­ler­shoop in the North­ern Cape, came on­line in De­cem­ber and Aben­goa’s lat­est 50MW con­cen­trated so­lar plant, the Khi So­lar One near Uping­ton, started op­er­at­ing last week. Three new wind farms have also started feed­ing into the grid, adding 270MW to the sys­tem.

Across the five bid rounds, 3 357MW of wind en­ergy has so far been pro­cured, a third of the planned ca­pac­ity. At the mo­ment, wind IPPs are de­liv­er­ing 960MW to the power grid.

So­lar comes in se­cond, with a to­tal of 2 292MW so­lar pho­to­voltaic ca­pac­ity pro­cured in all the bid rounds, and is con­tribut­ing more than a third of South Africa’s to­tal pro­cured re­new­able en­ergy ca­pac­ity. At the mo­ment, so­lar pho­to­voltaic projects de­liver 960MW to the grid.

Con­cen­trated so­lar is de­liv­er­ing 200MW, with three op­er­a­tional plants. Two other plants, which will add 200MW in­stalled ca­pac­ity, are be­ing con­structed.

Re­new­able en­ergy has also been a boon for the econ­omy. Of­fi­cial fig­ures show that so far the pro­gramme has at­tracted R192.6 bil­lion in com­mit­ted in­vest­ment, of which 28%, or R53.2 bil­lion, is for­eign in­vest­ment across the bid win­dows. This is equal to 85.8% of all for­eign di­rect in­vest­ment in the coun­try in 2013.

Telkom close to deal on broad­band roll-out

Telkom is close to reach­ing an agree­ment with the govern­ment to start the first phase of broad­band roll-out, which will cost R750 mil­lion, ac­cord­ing to two peo­ple fa­mil­iar with the mat­ter.

There have been ex­ten­sive dis­cus­sions about the con­tract be­tween Telkom and the govern­ment. Telkom had car­ried out site in­spec­tions and stud­ied how to im­ple­ment the plan in eight dis­tricts, one of the peo­ple said.

Telkom said it could not com­ment on a govern­ment pro­ject. The depart­ment of telecom­mu­ni­ca­tions did not re­turn calls seek­ing com­ment.

The ANC has pledged to ex­tend broad­band ac­cess to ev­ery house­hold by the end of this decade. The govern­ment would “fast-track” the first phase of broad­band roll-out to con­nect more than 5 000 govern­ment fa­cil­i­ties in eight district mu­nic­i­pal­i­ties over three years, Pres­i­dent Ja­cob Zuma said in his state of the na­tion ad­dress on Thurs­day. The pro­posal may cost as much as R98 bil­lion.

South Africa is one of the world’s strag­glers when it comes to in­ter­net ac­cess, with just 3.21 fixed-line broad­band sub­scribers per 100 peo­ple in 2014, ac­cord­ing to fig­ures com­piled by the World Bank.

The DA said award­ing the broad­band con­tract to Telkom may be “legally du­bi­ous” be­cause there hadn’t been a trans­par­ent ten­der process.

“Telkom is not within govern­ment struc­tures,” Mar­ian Shinn, the DA’s shadow min­is­ter for telecom­mu­ni­ca­tions, said via SMS. “It is JSE listed, not a state-owned com­pany, and govern­ment must deal with it as it does other com­pa­nies in the sec­tor.”

Vo­da­com said it sup­ported govern­ment’s broad­band roll-out pro­gramme.–

Bloomberg

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