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SADC’s real state of power and the case for renewable energy

6th May 2016

By: Creamer Media Reporter

  

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Agility, flexibility and new thinking are required to solve the power-stressed Southern African region’s energy crisis.

Less than one-third – 24.7% – of the Southern African Development Community (SADC) region’s population have access to electricity, and the countries comprising the bloc are limited economically, owing to delayed or nonexistent investment in new electricity generation infrastructure, while the installed infrastructure is ageing and in urgent need of refurbishment or replacement. A case in point is Kariba dam, on the Zambezi river.

In the whole of Africa, a staggering 700-million people, out of a total population of 1.1-billion, have no access to electricity and only 24% have access to some electricity, while the continent’s level of consumption is only one-fifth of the global electricity consumption average.

In South Africa, where only 4.5% of 44 000 MW of generating capacity comes from renewable sources, the Department of Energy is to expand the renewables procurement programme to generate 6 000 MW by 2020, and 92 independent power producers (IPPs) have been selected for the programme. Of these, 79 projects have reached financial close and are either generating power or are being constructed.

Electricity drives an economy; a country’s gross domestic product is correlated to the extent to which the country has developed its electricity transmission grid, as well as access to that grid. When the demand for electricity exceeds the supply, a country’s economy suffers.

The primary goal of implementing energy generation projects is to supply commerce and industry, as well as households, with clean and reliable energy. When considering electricity in the SADC region, we are speaking about supplying electricity to a large number of industrial and commercial users, yet only one-third of the population. (In South Africa, three-quarters of the population have the direct benefit of being connected to the electricity supply.) The balance of the population that are currently not served will remain unserved until they have access to the electricity network.

Simply putting electrons into a grid network does not solve the ‘access to electricity’ problem; rather, it enables increasing economic activity.
Between the 14 countries making up the SADC bloc, the Southern African Power Pool supplies the backbone of power that is traded across borders, supporting the economic development of communities and providing access to grid power. However, centralised, capital-intensive power grids will become a thing of the past, as renewables (linked with storage systems) quickly and efficiently supple- ment an existing grid network by producing and/or storing energy close to the best resources and where the loads exist.

Currently, in South Africa, the absence of load-shedding is not due to Eskom’s recovery plan related to maintenance and bringing new generators on line; it is the result of business – and, therefore, electricity demand – having slowed down for global and local recessionary reasons. In 2015, we were expecting South Africa’s economic growth to be between 2% and 2.5% but, owing to load-shedding, the actual growth was nearer 1%.

One of the key opportunities for renewables is localised power grids, or grid hubs, where energy is produced at or nearer the point of demand.

With Africa’s excellent natural resources, renewable energy allows linkages between regional hubs of generation and consumption. There is limited need to invest in the infrastructure of large centralised power pools, which take decades to build; a more considered and strategic approach to energy planning that considers the entire cycle from generation to consumption, minimizing the transmission distances, smart grids and energy storage, is cheaper and more efficient on a life cycle basis.

If renewable energy is implemented using a local, self-consumption approach, it can very efficiently power the nonconnected population. juwi recently completed a project for the Council for Scientific and Industrial Research, in Pretoria, which is aiming at a virtual power plant concept of power supply and consumption. The 558 kW peak ground-mounted photovoltaic (PV) solar power plant site was providing electricity to the CSIR grid within six months at a levelised cost of R0.83/ kWh (about $0.05/kWh). This is lower than the corresponding grid tariff in that area, even though that tariff reflects lower-cost, old generators responsible for the power supply there. New PV is cheaper than old coal.

Renewables supply power quickly and efficiently to the national grid, such as at Prieska, in the Northern Cape, where juwi is constructing a 86 MWp solar PV plant for Sonnedix-Mulilo. This project will be completed in less than 18 months, at a cost well below that of coal or nuclear power on a whole life cycle cost accounting (LCOE) basis. Renewable energy deploys energy at any scale in a fraction of the time of a large-scale fossil fuel provider.

While economically viable storage-at-scale is on the horizon, hybrid solutions, such as renewable energy pairing with gas and energy storage, provide steady available power. Renewable energy can be ‘plugged in’ where there is wind and sun.

Africa has excellent solar resources and some of the highest levels of sunlight in the world. Owing to demand in Africa, there are hundreds of potential large-scale solar energy projects. There is more potential investment money available than there are such projects, yet the projects do not get off the ground quickly. The SADC region should be aiming to present the most bankable projects to potential investors to realise this enormous potential.

Nuclear energy is shrouded in secrecy (in terms of the procurement model and costs, for example). The renewables industry is transparent, compliant and fully funded by private investors, who take the risk and secure the price of energy for 20 years. Renewables provide the lowest LCOE and, until nuclear can do the same and produce energy quickly, we firmly believe that renewable energy is the quickest and most cost-effective solution to the SADC region’s energy crisis.

With the independent power producer procurement model of renewables, we pay once – when we need it and consume it. With the current investment/procurement model for large coal and nuclear generators, we are paying twice for energy – the taxpayer pays for the plant, and businesses and individuals pay for the electricity when they use it. Government (read ‘taxpayer’) takes all the risk if anything goes wrong. Medupi and Kusile are classic examples of risk in the projects being borne by the taxpaying public, as the final price of the generated electricity will nearly have doubled as a direct result of project delays leading to extensive increases in finance costs (interest charges) as the projects are drawn out.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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