Oct 22, 2012
Financial closure on renewable projects needed to maintain investor confidence – SAWEABack
Cape Town|PROJECT|Projects|Renewable Energy|Renewable-Energy|Electricity Generation Capacity|Energy|Manufacturing|Prospective Independent Power Producers|Wind Energy|Wind Energy Sector|Jasandra Nyker|Johan Van Den Berg|Power
© Reuse this
“The programme is nothing short of impressive. But to really show that this programme works and to maintain investor confidence, financial close needs to occur to acquire confirmation that we indeed have a wind industry,” SAWEA chairperson Jasandra Nyker said during the opening session of the conference.
Reflecting on the past year in the South African wind energy sector, Nyker was positive about the progress the industry had made with eight wind projects having been selected out of the total of 28 projects under round one of the REIPPP, totalling 634 MW, and another seven wind projects being successful in round two, accounting for 563 MW. “For any first-time industry that is an impressive accomplishment and we should not blindly cast that achievement aside,” she said.
However, as with any new programme there was always room for improvement, said Nyker, adding that government had to engage further with industry to ensure that the “very expensive learnings of round one” were taken into consideration as the REIPPP moved into future rounds. “Ask any round-one developer, the process to financial close has to be done in a more cost-effective manner going forward,” she asserted.
Nyker added that the wind industry welcomed the government’s announcement that there would be further allocation of future electricity generation capacity for renewable energy. “The 1 470 MW allocated to wind energy ensures that wind will become the dominant player in the renewable-energy mix in the years to come.”
The theme of the localisation requirements for the REIPPP would also be highlighted at the 2012 Windaba conference and Nyker warned that the government needed to give the long-term implications of the policy serious thought. “The [capital expenditure] associated with constructing local manufacturing plants is significant and it is going to require a much longer-term view and a further megawatt commitment to wind to ensure that these manufacturing plants will be stable. Given the current global and local economic environment we cannot afford to invest in manufacturing facilities that will end up underutilised or loss making in the future,” she said.
“In this modern-day world of tighter operating margins and a theme of downsizing globally, the ‘just do it’ approach needs to be given much further thought and evaluation. Like many of us sitting here in this hall today, we want to build a localised industry that can stand on its own and indeed create that manufacturing gateway to the rest of the SADC [Southern African Development Community] region,” said Nyker.
The first REIPPP round required 25% local content for wind projects, which, according to SAWEA CEO Johan van den Berg was not overly onerous as it could be covered in the ‘balance of plant’ portion of the project costs. Even with the third round requiring 40% local content, Van den Berg said he thought this was still possible, though it would require South African blade and turbine contributions. “As we go further up it becomes a little bit more challenging but it’s not that it can’t be done, it’s the question of whether it can be done,” he said.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Updated 3 minutes ago A research partnership has been launched in South Africa in a quest to make air transport more environmentally and economically sustainable. Hydrogen South Africa (HySA) Systems, the National Aerospace Centre and Airbus are working together on research into using...
Updated 42 minutes ago The South African National Roads Agency Limited (Sanral) will not make representations to the advisory panel on e-tolls and their socio-economic impact, it said on Tuesday. "No, Sanral will not be making representations," spokesperson Vusi Mona said in an e-mail to...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...