Oct 16, 2009
Feed-in tariff seen as growth stimulus for renewable-energy marketBack
Cape Town|Aurora Power Solutions|Eskom|Frost & Sullivan|Renewable Energy|Renewable-Energy|South Africa|Spain|United Kingdom|United States|USD|Electricity Using Renewable Energy|Local Renewable-energy Consulting|Particular Technology|Project Development Services|Renewable-energy Consulting|Renewable-energy Feed-in Tariff|Renewable-energy Market|Renewable-energy Projects|Renewable-energy Sector|Solar Renewable-energy Technologies|Sun-driven Energy|Cape Town-based|Northern Cape|James Walsh|R10|Particular Technology|PV Technology|Solar Renewable-energy |Solar Renewable-energy Technologies
© Reuse this
However, the renewable-energy market in South Africa is expected to grow exponentially in the next few years, largely owing to the announcement of the renewable-energy feed-in tariff (Refit) in March by the National Energy Regulator of South Africa (Nersa).
This is according to a study undertaken by international growth partnership company Frost & Sullivan, which indicates that the revenue earned by the renewable-energy sector is expected to increase tenfold, from $28,4-million in 2008 to about $262,3-million by 2015.
This expected exponential growth is good news for local renewable-energy consulting and project development firms.
One such company is Cape Town-based renewable-energy consulting and project development firm Aurora Power Solutions.
Established 18 months ago, Aurora Power Solutions has a portfolio of 200 MW of solar sites under development and is focused on delivering a host of project development services for the renewable-energy sector.
In an interview with Engineering News, Aurora Power Solutions director James Walsh explains that the team of four have skills in engineering, economics and research, and have international experience gain while working on various renewable-energy projects in the US, Spain and the UK.
The company consults on projects and provides expertise for all solar renewable-energy technologies, although Walsh elaborates that the company is particularly focused on the development of solar photovoltaic (PV) technology currently.
The focus on that particular technology is primarily based the recent announcement by Nersa of an R4,48/kWh feed-in tariff for power produced by PV technology, which the company believes, along with concentrating solar power, could finally unlock the doors for the large-scale production of clean, sun-driven energy in South Africa.
Walsh elaborates that PV could be highly successful in South Africa because the country has one of the best solar resources globally, the technology is easily deployed and the project risk can be adequately managed in the South African environment.
Currently, the company is focusing its attention on PV projects over 1 MW in size that will capture Refit.
Walsh states that there is a lot of potential for solar PV projects, especially in the North West province and the Northern Cape province.
However, such projects are expensive, costing between R50-million and R60-million each megawatt of capacity installed a site.
Thus, while the company is currently undertaking prefeasibility studies for potential PV projects, its key priority is to raise funding to take its project pipeline to financial closure.
Walsh elaborates that Aurora Power Solutions is seeking to raise capital through private-equity funds, infrastructure funds venture capital funds.
To date, the company has received limited funding, but Walsh elaborates that the funding has been too little to take any project to financial closure, which requires R10-million to 15-million.
Walsh admits that the current global economic recession is making fundraising difficult, but remains optimistic that an improvement in economic circumstances will lead to more funding. He also notes that South Africa does not have an established venture capital industry that has a mandate to invest in early-risk capital.
The other factor that is inhibiting project development is the lack of a developed offtake market in South Africa.
To date, the industry has not been able to secure such an agreement. However, the company remains optimistic about its future in the local renewable-energy sector and the growth of large-scale PV projects in South Africa.
“The installation of large-scale grid-connected solar PV systems in South Africa provides an efficient way to quickly diversify its power generation portfolio,” says Walsh. “With the potential adoption of the new Nersa feed-in tariff, we now finally stand on the verge of developing a new industry in South Africa.”
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines
Other Electricity News
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 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...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
Electricity Supply Corporation of Malawi (Escom) is inviting expressions of interest from eligible firms for the supply and install automatic fire suppression systems in the cable tunnels at its Nkula B and Tedzani power stations, on the Shire river. Escom will...
Lubricant company Castrol will provide lubricants, brake and hydraulic fluids for use in the Bloodhound supersonic car (SSC). The 1 600 km/h car, which will attempt to break the land-speed record in 2015 through to 2016, is being constructed in Bristol, in the UK.
State-owned electricity producer Eskom and government are assessing ways to secure the financial resources necessary to enable the utility to resume power-saving schemes, as well as to contract with those municipalities and independent power producers (IPPs) able to...
Diversified industrial engineering group PSV’s subsidiary African Cryogenics is gearing up to increase its operating capacity through an investment into a 7 000 m2 manufacturing facility, which is under construction and expected to be completed at the end of this...
Freight and logistics service provider Grindrod has a R10-billion project pipeline planned for sub-Saharan Africa, says Grindrod CEO Alan Olivier. He says the capital expenditure for some of these projects has already been approved by the Grindrod board –...