Renewable energy projects on track despite Covid-19
As the coronavirus continues to sweep through world economies, its effect on the rise in renewable energy is in question.
Enel Green Power is a global leader in renewable power and one of the largest players in SA’s green power sector. Despite the challenges brought by Covid-19 in SA and the rest of the world, William Price, head of Enel Green Power in Southern Africa, sees a brighter, greener future ahead. What traction and trends are being seen in the renewable power industry in emerging markets like SA?
Globally, solar panels, wind turbines and other renewable energy technologies are becoming more affordable and accessible to the private sector every year. People can also install various green energy technologies at home and, with what is available today, households can be in the position to generate enough energy to cover their needs, and the excess electricity can be sold back to the grid.
Another major factor is grid parity — when the cost of renewable energy becomes lower or equal to the cost of traditional energy sources —
making non-emitting energy that much more competitive.
This is already the case in several areas of the world that are rich with renewable sources, and the trend is expected to accelerate as technologies become more mature. Africa has a huge renewable potential, much of which lies within Sub-Saharan Africa. The decreasing cost of renewable technology is key to fully leverage on this potential.
What are Enel Green Power’s current activity and future plans in SA and the region?
In SA we are building five wind farms of roughly 140MW each, for a total of around 700MW. We also boast 520MW of already operating renewable capacity: 200MW combined capacity from two wind farms and 320MW from five solar plants.
Enel Green Power is actively scouting for new opportunities. The company is carefully monitoring the development of a sound regulatory framework. For us, promoting renewables is the quickest way to boost the country’s energy sector. More broadly, when it comes to renewable deployment at the regional level, we are working to conclude a joint venture agreement with a sizeable financial partner by year end.
As Covid-19 hinders movement of people and goods and destroys economic growth prospects, how are renewables projects at various stages of planning, construction and operation affected?
Regardless of downgraded growth projections and delays, industry analysts still estimate overall growth in worldwide renewable energy capacity through at least 2021. Recent projections appear more optimistic than in the earlier days of the pandemic as renewable facilities such as wind farms are typically built in remote, rural areas and many areas have allowed the construction of these projects to continue as an essential activity.
Despite the supply chain setbacks due to Covid-19, the long-term growth trajectory of the renewable industry will likely be unaffected.
In SA, our commercial operating plants provide essential services to the country and have continued to operate throughout the pandemic. Since their energy sources are renewable, the plants do not require technicians on-site to continuously supply fuel, as is the case for thermal plants.
We are in the process of restarting construction sites as, on May 15, the government lifted the suspension of construction activities that resulted from the level 5 lockdown.
We are working to mitigate the impacts of this suspension and are continuing with our development and construction activities.
Some research houses say the strong dollar may affect the economic viability of renewable projects in emerging markets. Does the weak rand affect Enel projects in SA?
In this country, the company is behaving like an SA investor. We borrow money in local currency and our power purchase agreements are paid in local currencies. As a subsidiary of a large multinational group like Enel, with its diversification and exchange rate mitigation strategies, we are in a good position to weather volatility.
What is your outlook for the sector and Enel Green Power once the pandemic passes?
We are committed to sustainable energy in all the regions where we operate. As the world’s economy starts to pick up from the Covid crisis, we expect the upward trajectory of renewables to continue to accelerate, serving as one of the main drivers of recovery.
The private sector can help in this next phase, and a proper environment for private investments can support governments to ensure a quick recovery.