Oct 05, 2012
Renewable energy presents major opportunities for SA corporationsBack
DURBAN|Africa|Industrial|Mining|Projects|Renewable Energy|Renewable-Energy|Resources|Africa|South Africa|Able Energy|Biomass Plants|Conventional Energy|Electricity|Electricity Supply|Energy|Energy Costs|Energy Projects|Energy-intensive|Solar Energy|Wind Energy|Martin Sprott
© Reuse this
He observes that there has been a noticeable shift in the last 12 months among heavy industrial companies from relying on the national grid to adopting renewable energy.
AT Kearney associate Niriksha Singh adds that energy-intensive companies, in particular, are more likely to switch from conventional energy to using renewable energy in the near future.
“It is not always possible to get energy from the grid, especially for those companies that are located in remote areas. In these cases, self-generation is necessary,” says Sprott.
Additionally, the United Nations Framework Convention on Climate Change’s seventeenth Conference of the Parties (COP17), held in Durban last year, highlighted the importance of renewable energy.
Sprott says many CEOs and senior officers have acknowledged the importance of renew- able energy. He recalls that, following the awareness raising activities around COP17, there was a noticeable uptake in carbon credit and renewable energy projects in South Africa.
However, he believes there is a need to develop coherent companywide strategies for implementing such projects, as many were only sporadically introduced.
Other challenges faced by companies considering the use of renewable energy include the geographical distance between the point of generation and the point of consumption and the lack of available materials for biomass.
Nevertheless, Sprott is hopeful that more companies will implement renewable energy projects, saying this will create good opportunities not only for the company but also for the surrounding communities where these projects are implemented.
Renewable energy offers a stable and secure electricity supply. It also reduces carbon dioxide emissions, which result not only in less carbon being taxed but also in a company’s reputation being boosted.
Singh agrees that the implementation of renewable energy is a good strategy for all companies, as it drives transformation and communicates to staff and customers that the companies are responsible.
“This is a good way for companies to build loyalty among their customers. A drive towards clean energy can lead to better operational and financial performances,” she notes.
Industries such as mining can imple- ment renewable energy projects to create job opportunities, provide electricity for local communities and as a means of community engagement.
For instance, mining companies can implement biomass projects and involve the local communities in growing biomass resources.
Sprott advises companies to consider partnership structures that will help overcome the capital constraints faced by renewable energy projects, but says a major barrier is the low rate of the return on investment.
“Typical retail companies and companies in other industries will want to see a 10% internal rate of return with relatively short payback periods. Most renewable energy projects, however, have lower rates of return and payback periods of up to 20 years.
“Companies need to find partners that have balance sheets and business models in place to support renewable energy projects. Such companies could be utility companies that negotiate offtake agreements with their partner companies,” he suggests.
Sprott says international development agencies and international development banks can potentially provide risk capital to companies to establish renewable energy projects.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Electricity News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...