A new Council for Scientific and Industrial Research (CSIR) study calculates that South Africa’s wind and solar photovoltaic (PV) projects generated nearly R4-billion more in financial benefits during the first half of 2015 than they cost the country.
Conducted by the CSIR Energy Centre the study estimated cumulative savings of R8.2-billion, which were partially offset by the tariff payments to renewables independent power producers (IPPs) of R4.3-billion between January and June 2015.
The study, which is the second completed by the centre, was based on actual hourly production data for the different supply categories in the South African power system, including coal, diesel, wind and solar PV.
It was based on all renewables projects operating during the period, which had a combined nameplate of 1 800 MW. These projects were procured under the first two bid windows of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
In total, 92 renewables projects, with a nominal capacity of 6 243 MW, had been procured since the announcement of the first REIPPPP preferred bidders in late 2011 and the Department of Energy reported earlier this year that it aimed to procure a further 1 800 MW under an “expedited” round before year-end.
CSIR Energy Centre head Dr Tobias Bischof-Niemz told Engineering News Online that the operational projects included all solar PV projects procured during bid windows one and two, as well as all wind projects procured during bid window one and a few more from bid window two.
The weighted average price paid to the operating renewables projects during the six-month period was R2.16/kWh.
Bischof-Niemz said a total of R3.6-billion of the savings were derived from the replacement of diesel and coal fuel costs, with 2 TWh of wind and solar energy replacing the electricity that would have otherwise been generated from diesel- or coal-fired stations.
A further R4.6-billion in benefits arose as a result of the wind and solar power plants ensuring the avoidance of 203 hours of ‘unserved energy’.
The study found that during 15 days from January to June 2015 the contribution from solar and wind either prevented or delayed load-shedding, or reduced its severity. Eskom has broken its load-shedding model into four stages, with stage one involving 1 000 MW of cuts and stage four 4 000 MW.
“Therefore, renewables contributed a total net benefit of R4-billion (or R2/ kWh of renewable energy) to the economy,” Bischof-Niemz asserts.
Wind projects, he added, were “cash positive for Eskom” to the tune of R300-million; saving R1.5-billion in fuel payments while costing only R1.2-billion in tariff payments to IPPs.
“Our study shows that in the first six months of 2015, the trend that started in 2014 continued and speeded up, and that renewable energy provided a huge net financial benefit to the country.
“What is more, the cost per kWh of renewable energy for new projects is now close to 80c for solar PV and between 60c to 70c for wind projects. That will keep the net financial benefits of new renewables positive, even in a future with a less constrained power system,” he added.