Lightening the load
Renewable energy gives back to the country far more than it takes. Often criticised as costly and ineffective, solar photovoltaic (PV) and wind energy is in fact shielding the country from more severe load-shedding and excessive burning of diesel to run Eskom’s emergency back-up generators.
Solar PV and wind energy plants created R4bn more in financial benefits to the country than they cost during the first six months of 2015, the Council for Scientific & Industrial Research (CSIR) says in its latest analysis of the impact of renewables on the national grid. This brings to R4,8bn the total contribution of renewables since early 2014 when the first solar PV and wind plants began supplying the grid.
However, the study covers only 1 800 megawatts (MW) of the 6 300 MW of capacity procured to date under government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Renewables’ contribution will increase exponentially as more plants go online and government awards further contracts.
The study covering the first six months of 2015 is based on two benefits from renewables. The first is derived from R3,6bn of diesel and coal fuel cost savings. This is because 2 terawatt-hours (tWh) of wind and solar energy replaced the electricity that would have otherwise been generated from diesel and coal (1,5 tWh from diesel-fired open-cycle gas turbines and 0,5 tWh from coal-fired power stations).
The second benefit is a saving of R4,6bn to the economy derived from 203 hours of so-called “unserved energy” that were avoided through the contribution of solar and wind plants. During these hours, explains the CSIR, “the supply situation was so tight that some customers’ energy supply would have had to be curtailed (unserved) if it had not been for the renewables”.
The CSIR says that during 15 days from January to June 2015, load-shedding was avoided entirely, delayed, or a higher stage of load-shedding was prevented because of the contribution of wind and PV projects.
The total savings of R8,2bn were offset by R4,2bn Eskom paid to renewable energy producers, leaving a net benefit of R4bn, says the CSIR.
The study is based on a methodology developed by the CSIR Energy Centre to determine whether at any given hour of the year, renewables have replaced coal or diesel generators, or whether they have prevented unserved energy or load-shedding.
However, the study was based on “conservative assumptions”, says the centre’s head Tobias Bischof-Niemz. “The actual cost savings that renewable energy sources brought during the first six months of 2015 are therefore presumably higher than shown by the study.”
Sharp decreases in tariffs for solar PV and wind energy, he adds, “will keep the net financial benefits of new renewables positive, even in a future with a less constrained power system”.
In fact, says SA Wind Energy Association chief executive Johan van den Berg, wind energy “can be said to have cost less than nothing”. Wholesale electricity prices, he explains, have escalated from R0,41/kWh in 2010/2011 to R0,79/kWh today and are projected to be R0,93 kWh two years from now, an increase of 123% over seven years.
“South Africans are liable for all Eskom’s expenses,” he says. “Indeed, by some estimates the interest at the new Medupi power station runs at R30m/day. This is the cost of each day the plant is late. This is the cost of each day of industrial action where no work is done. And even if we all go off-grid and never use the power from Medupi, the SA collective will still have to pay for it.”
In the first years, wind power will come at close to zero cost through the avoidance of diesel generators and load-shedding.
“Indeed, last year wind power saved the country R300m and can thus be said to have cost less than nothing. If 294 wind turbines can do this for our country and our people now, think what 2 500 might do by 2020,” he says.