By the third quarter of 2010, South Africa would have selected the renewable energy independent power producers (IPPs) to meet the country's target of 10 000 GWh of renewable energy by 2013, the National Energy Regulator of South Africa (Nersa) full-time regulator for electricity Thembani Bukula said on Tuesday.

Speaking at a briefing organised by the Mail & Guardian and Neotel, Bukula acknowledged that the regulatory environment had hitherto been inadequate to allow for the introduction of renewable IPPs. But he said that work on the selection criteria for the introduction of these projects was well advanced and would build on the first two rounds of the renewable energy feed-in tariffs, which were concluded last year.

Some R12-billion had been approved as part of the recently approved Eskom tariff increases to enable the utility to contract with cogenerators and renewable IPPs between 2010 and 2013. Such contracting could also be concluded with the independent system operator (ISO), should it be established as proposed.

"But come hell or high water, those 10 000 GWh must be in the system by 2013," Bukula insisted, explaining that it would translated into renewable projects with a combined capacity of 1 140 MW.

The bulk of this capacity was likely to be wind based, with solar, landfill gas and mini-hydro making up the balance.

A third Refit phase would be considered soon to enable even micro, 1 MW-type solutions, could be introduced at a later stage.

However, Bukula indicated that there could be some resistance from municipalities, which could lose revenue should households or property developers be able to feed into the grid.

There was also a warning that, unless this renewable capacity was coupled to the successful implementation of the R400-billion Eskom build programme, the mass roll-out of demand-side management (DSM) schemes and a new energy-efficiency consciousness, South Africa faced the very real threat of returning to a period of load shedding from late 2011, early 2012.

Nersa had granted funds worth about R5-billion in the Eskom tariff increases for DSM, including a big solar water heater roll-out.

"DSM is the lowest hanging fruit," Bukula insisted, adding that 8,5 TWh would have to be saved by 2013 to create the space for modest growth, as well as to avoid further price spikes.

If South Africa implemented all the plans effectively, Nersa projects that tariffs would only need to rise at around the rate of inflation as from 2013/14.