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Feb 06, 2009

Danes ready to support South Africa’s wind energy roll-out

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South Africa’s Minister of Minerals and Energy, Buyelwa Sonjica, has announced that the Royal Danish government has given R60-million to the metropolitan areas of South African local government for renewable energy projects.

Speaking at a Denmark-South Africa wind energy seminar in Pretoria, she noted that the money would be used not only for wind energy, in which Denmark has extensive expertise, but also for other renewable-energy projects, such as methane gas capture from landfills.

The Danish Minister of Foreign Affairs, Per Stig Moller, and Sonjica signed a memorandum of understanding on energy cooperation between Denmark and South Africa.

About 27% of Denmark’s energy supply is from renewable-energy sources, and most of this is from wind power. The country has an installed capacity of 3 200 MW of wind power, and about 200 companies, which employ some 22 000 people, propel the industry in Denmark.

Moller said that the country has generated some R70-billion in revenues from exporting green technologies. “Wind is the cornerstone of the Danish renewable-energy fairy tale,” he affirmed.

Sonjica stated that the South African government’s ideal outcome in developing renewable energy in the country was that the support of the industry would promote skills exchange, which would lead to local production capabilities. “Local production means opening up, not only to local players, but also to allow international players to come in as independent power producers,” Sonjica said.

She acknowledged that South Africa has struggled to attract foreign power producers because of the country’s low electricity tariffs in the past.

The agreement aimed at providing wind energy solutions as one element of rectifying South Africa’s energy crisis and boosting economic links between the two countries.

The agreement also contained cooperation on issues such as wind mapping and capacity build- ing.

South Africa had a target of producing 10 000 GWh of electricity from renewable resources by 2013. This was felt by some to be low, as South Africa’s abundance of natural resources was felt to have more to offer.
Government, business, research institutions, the metros, developers, ordinary citizens, job seekers and the environment itself could emerge victorious when a whole new sector was opened in South Africa, the Danish embassy emphasised.

The Business Case

Cutting energy costs and develop- ing cleaner, more efficient solutions would be the industrial revolution of the twenty-first century, emphasised Moller.

He noted that by redirecting economies to low-carbon solutions, jobs could be generated and economic growth stimulated. “The key message is that green technology is not only good for the environment, but also good for business,” said Moller.

“I believe there is significant potential for future growth, employment and wealth within the growing global market for green technologies,” he emphasised.

Moller stated that, in terms of wind power collaboration, Danish companies stood ready to help South African companies design, construct, and ensure system integration from wind mapping to the maintenance of facilities.

Denmark also had the lowest energy intensity in the European Union, and was proud of the fact that while the economy had grown significantly, energy consumption had remained flat.

“There is no contradiction between a sustainable climate change strategy and sound economic policy. Good ecology is good eco-nomy, and good economy is good ecology,” said Moller.

He further stated that energy efficiency saved money, and added to the profits of a company, where monies saved could be used for other productive services. Making use of renewable energy also meant that industry was not reliant on volatile fossil fuel energy prices and suppliers.

“Turning from a high-carbon economy need not be at the cost of economic growth,” reiterated Moller.
The production of renewable and green energies opened up opportunities for industry focused on the design and manufacture of green technologies, and was a sector in which the South African government hoped to see growth.

The Department of Minerals and Energy recently confirmed that it had received more than 100 renewable-energy project proposals, involving as much as 5 000 MW of potential generation capacity.

Some 45% of the applications related to wind energy, 34% to biomass projects and 8% to small-scale hydro schemes.

A vital component of investment into renewable energy production, was the establishment of an adequate feed-in tariff, as the cost of producing energy from renewable sources was still significantly more expensive than energy generated by fossil fuels, particularly for South Africa, with its abundant coal resources.

The National Energy Regulator of South Africa hoped to finally approve the long-awaited renew- able-energy feed-in tariff on March 9.

However, the proposed tariffs had been criticised for being too low to truly entice investors, as well as not extending for a long enough period, as the period of feed-in tariff support would be 15 years, to 2022.

Edited by: Martin Zhuwakinyu
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