14.04.2016 / Press releases, Press, South Africa

The real state of power in the SADC region and the case for renewable energy

Agility, flexibility and new thinking, are required to solve the power-stressed Southern African region's energy crisis. Greg Austin of juwi Renewable Energies analyses the situation and provides a case for renewables.

Greg Austin

Some energy facts

  • 700-million of Africa’s 1.1-billion population have no access to electricity and only 24% having access to some electricity. 
  • The continent’s level of consumption was only one-fifth of the global electricity consumption average. 1
  • Closer to home, things are no different: Less than a third (27,4%) of the Southern African Development Community’s (SADC) population has access to electricity.
  • Despite making big inroads into clean energy, approximately 4.5% of South Africa’s 44 000MW of generating capacity comes from renewable sources.
  • In South Africa, the Department of Energy (DOE) 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. 2
  • SADC including South Africa are limited economically due to delayed or non-existent investment in new electricity generating infrastructure, while much of the installed capacity is aging and in urgent need of refurbishment or replacement. The hydropower at Kariba Dam – which supplies power to both Zambia and Zimbabwe – is a case in point.

Energy drives an economy

It is no coincidence that Africa is the least developed of all the continents. Electricity drives an economy, and the extent to which a country has developed its electricity transmission grid, as well as access to that grid is highly correlated to a country’s Gross Domestic Product or GDP. In addition, when the demand for electricity exceeds the supply, a country’s economy suffers. In the past five or so years, this has very much been the case in South Africa.

Ultimately the primary goal of implementing energy generation projects is to supply commerce and industry, and secondly to ensure access by households to a clean and reliable source of energy for a range of domestic end-use requirements. When considering electricity in SADC, in fact we are speaking about supplying electricity to a large number of industrial and commercial users, yet only one-third of the population. (In South Africa, three-quarters of the population has the direct benefit of being connected to the electricity supply). The balance of the population not served will remain unserved until they have access to the electricity network.

Therefore, simply putting electrons onto a grid network does not solve an access to electricity problem, it rather enables increasing economic activity.

Between the 14 countries making up SADC, the Southern African Power Pool (SAPP) supplies the backbone of power that is traded across borders, supporting the economic development of communities and providing access to grid power. However, centralised, capital-intensive power grids will become a thing of the past, as renewables (linked with storage systems) quickly and efficiently supplement an existing grid network by producing and/or storing energy where the best resources are and where the loads exist.

Supply versus demand

Currently in South Africa, the absence of load-shedding in the country is not due to Eskom’s recovery plan related to maintenance and bringing new generators on line; it is rather because business – and therefore electricity demands – has slowed down significantly for global and local recessionary reasons. In 2015, we were expecting South Africa’s economic growth to be between 2-2.5%, but due to load-shedding the actual growth was nearer 1%.

Africa needs power, and quickly.

Generation at the point of demand

One of the key opportunities for renewables is localised power grids, or grid hubs, where energy is produced at or nearer the point of demand.

With Africa’s excellent natural resources, renewable energy (RE) allows linkages between regional hubs of generation and consumption. There is limited need to invest in the infrastructure of large centralized power pools, which take decades to build; a more considered and strategic approach to energy planning that considers the entire cycle from generation to consumption, minimizing the transmission distances, smart grids and energy storage is cheaper and more efficient on a lifecycle basis .

If RE is implemented in a local, self-consumption approach, it can very efficiently power the non-connected population. juwi recently completed a project for the Council for Scientific and Industrial Research, in Pretoria, South Africa, which is aiming at a virtual power plant concept of power supply and consumption. The 558 kW-peak groundmounted photovoltaic (PV) solar power plant site was providing electricity to the CSIR grid within six months, and at a levelised cost1 of R0.83 per kWh (about $0.05/kWh). This is lower than the corresponding grid tariff in that area., even though that tariff reflects lower-cost, old generators responsible for the power supply there. New PV is cheaper than old coal.

Renewables provides power quickly and efficiently for the national grid. For example, at Prieska in the Northern Cape, juwi is constructing a 86 MWp solar PV plant for Sonnedix-Mulilo, which will provide electricity to the national grid. This project will take less than 18 months to complete, and at a cost well below that of coal or nuclear power  on a whole lifecycle cost accounting or LCOE basis. RE deploys energy in a fraction of the time of a large-scale fossil fuel provider, and can be deployed at any scale.

While economically viable storage-at-scale is on the horizon, but will be with us in a few years, hybrid solutions such as RE pairing with gas and energy storage provides steady, available power. Renewable energy can be ‘plugged in’ where there is wind and sun.

Abundance of sunshine facilitates bankable projects

Africa has excellent solar resources, amongst the highest levels of sunlight in the world, and due to demands in Africa, there are many hundreds of potential large-scale solar energy projects. It is a well-known fact that there is more potential investment money available than there are such projects, but yet the projects do not get off the ground quickly. As a continent and SADC region we should be aiming to present the most bankable projects to potential investors, to realise this enormous potential and thus removing this key barrier to our economic growth. We need to identify what those key elements are that will flip good projects to becoming bankable projects, and focus on getting the projects over the line. The finance is looking for a home and looking at flexible avenues to achieving investment into the projects that are waiting to move ahead.

Transparency in the energy industry

Nuclear energy in particular is shrouded in secrecy (procurement model, and costs). The renewables industry is transparent, compliant, and fully funded by private investors who take the risk and secure the price of energy for 20 years. Renewables provides the lowest LCOE, and until nuclear can do the same, and produce energy quickly, we firmly believe RE is the quickest and most cost-effective solution to SADC’s energy crisis.

Consider this: With the IPP procurement model of renewables, we pay once - when we need it and consume it. With the current investment/procurement model for large coal and nuclear generators, we are paying twice for energy – the tax-payer pays for the plant, and businesses and individuals pay for the electricity when we use it. The government (read: taxpayer) also takes all the risk if anything goes wrong with the project; Medupi and Kusile are classic examples of risk in the projects being borne by the taxpaying public, as the final price of the generated electricity will nearly have doubled as a direct result of project delays leading to extensive increases in finance costs (interest charges) as the projects are drawn out.

Sources

www.engineeringnews.co.za/article/progress-on-zizabona-interconnector-criticalto- unlocking-southern-african-power-projects-2016-02-16/rep_id:3182 1. city-press.news24.com/Business/the-state-of-renewable-energy-in-sa- 20160216 2

www.engineeringnews.co.za/article/africas-electricity-supply-challenge-opensopportunity- for-leadership-development-2016-02-16

 


Back to list

More topics

Press

Downloads

7._Commentary_-_the_state_of_energy_in_Africa.Final.14042016.juwi_RE.pdf

Download


Newest article

Key renewable trends power mining

Improved renewables technology, hybrid power, intelligent seamless integration, significant cost… more

Juwi RE & EDL deliver Agnew Hybrid Renewable Project in Australia

juwi Renewable Energy, the Australian Subsidiary of international project developer juwi is… more

Reatile Group completes phase 2 investment in juwi South Africa

juwi Renewable Energies has concluded a second investment transaction with Reatile Renewables,… more