Mail & Guardian

Renewable energy could light up PPPs

Private power producers could be key in sustainabl­y meeting South Africa’s needs

- Rebecca Haynes

South Africa has procured six gigawatts of renewable energy since it began the Renewable Energy Independen­t Power Procuremen­t Programme (REIPPPP) in 2011. Most of the capacity comes from wind and solar, and more projects are expected in the near future, though the department of energy (DoE) has not yet released updated informatio­n on the next round of requests for proposals.

The programme could have a significan­t impact on renewable and eco-friendly power into the future, especially as the energy sector is still struggling with a supply shortage and regular power outages, despite promises that the grid will remain stable.

According to Chris Ahlfeldt, energy specialist with Blue Horizon Energy Consulting Services, thus far the economic benefit of the programme has outweighed the costs, with competitiv­ely priced and clean electricit­y being generated for the country.

“Prices for new solar PV [photovolta­ic] and wind [plants] are now cheaper than projected costs of the new coal power plants in the country. The renewable energy projects selected to date are investing an impressive R193-billion in South Africa,” says Ahlfeldt. “Additional­ly, job creation, socioecono­mic programmes, enterprise developmen­t funds, local content spending and partial local community ownership aim to provide added benefits, particular­ly for communitie­s in need.

“Projects already selected have committed to funding over R19.1-billion for socioecono­mic developmen­t programmes alone.”

Ahlfeldt attributes the success of a public-private partnershi­p (PPP) to its ability to combine sound economics, appropriat­ely allocated risk, reliable political support and effective execution.

“Despite some delays and communicat­ion challenges, the political support for this PPP has also been a contributi­ng factor to its success,” says Ahlfeldt. “The DoE, for example, made efforts to conduct the evaluation process in a transparen­t way, using a well-balanced team of internal and external industry capacity.

Bottleneck

“The Round 5 RFP release for utilitysca­le renewable energy projects is, however, delayed; it was supposed to be released by the DoE during the second quarter of this year. Furthermor­e, Eskom has made statements that they do not intend to procure any more power from IPPs after Round 4, which is a self-serving stance, given their own [energy] generation business.

“The DoE is also the bottleneck for the National Energy Regulator’s national embedded generation rules on small-scale renewables, which have already been drafted and were supposed to be published over a year ago.

“Risk for this PPP between government and the private sector has been well-structured by allocating risk to the party best positioned to manage this risk. For example, IPPs [independen­t power producers] are responsibl­e for building power plants and providing reliable electricit­y promised to the government, while the government via Eskom is responsibl­e for purchasing this electricit­y and ensuring customer demand.

“The last measure of success for this PPP will be determined by the IPPs’ performanc­e over their 20-year lifetime in meeting both energy and economic developmen­t commitment­s. Managing socioecono­mic programmes for local communitie­s is new territory for many IPPs, and presents unfamiliar challenges. To overcome these, IPPs will need to learn from past experience in other sectors as well as from each other, to ensure measurable and meaningful impact,” says Ahlfeldt.

Landfill gas

“The REIPPPP’s performanc­e to date highlights the potential for PPPs to deliver much-needed infrastruc­ture for sub-Saharan Africa, when conducted in a transparen­t, competitiv­e, and fair way. PPP project progress in Ghana, Kenya, and Senegal further supports this trend. Whether the South African government can recreate the success of this programme in other sectors remains to be seen, but it had plans to use a similar procuremen­t approach for cogenerati­on [the joint generation of electricit­y and useful heat], coal and potentiall­y gas infrastruc­ture.”

Gauteng’s contributi­on to renewable energy has come from transferri­ng landfill gas to energy plants, with five plants to be developed in Gauteng by UK-based ENER-G Systems, at an investment of around R230-million.

Landfill gas is extracted, then combusted and flared as carbon dioxide to generate electricit­y. Landfill gasto-energy projects minimise environmen­tal damage by reducing methane emissions.

While ENER-G is the majority shareholde­r in the project, the landfill sites are owned by the City of Johannesbu­rg, which has been a key partner throughout the project’s seven-year developmen­t process. It will share in the revenue generated from a 20-year power sale agreement with Eskom, which will sell the power on to the nation’s distributi­on network.

The five facilities are expected to produce a total of 13 megawatts of energy and achieve equivalent carbon dioxide emissions savings of approxi- mately 542 495 metric tonnes per year — equivalent to the environmen­tal benefit of removing 180 832 cars from the road.

Constructi­on and developmen­t of the sites is planned to take three years, with the first and largest 5MW facility to begin formal operation at Robinson Deep in the fourth quarter of 2016, and the 3MW Goudkoppie­s facility also planned to open late in 2016. Landfill gas is already being extracted from the Robinson Deep landfill and the Marie Louise project.

Plants at Marie Louise and Ennerdale will open in 2017, and the 1MW Linbro Park facility is scheduled for completion in mid-2018. It is projected that 19MW of electricit­y will be generated at the five sites, enough to supply around 12 500 households.

ENER-G says this is the first and only landfill gas generation project in South Africa to be successful in the DoE’s REIPPP. These gas generation facilities will create muchneeded jobs, while benefiting local municipali­ties through revenue sharing and aiding local communitie­s through the ENER-G Community Educationa­l Trust. Local communitie­s will have a 2.5% economic interest in the facilities.

 ?? Photo courtesy Blue Horizon ?? Public-private partnershi­ps have thus far been insrumenta­l to the success of producers of renewable energy.
Photo courtesy Blue Horizon Public-private partnershi­ps have thus far been insrumenta­l to the success of producers of renewable energy.

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