Allocation downgrade a threat to wind-energy localisation goal

28th January 2014

By: Terence Creamer

Creamer Media Editor

  

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The 8 400 MW allocation for wind energy in the existing Integrated Resource Plan (IRP) is “a good lower target”, the South African Wind Energy Association (Sawea) asserts, while cautioning that South Africa will fail to take full advantage of its wind resource, as well as the associate localisation opportunities, should it move to downscale that ambition.

The draft IRP update, which is currently out for public comment, includes a ‘base case’ that reduces the allocation for wind from the 9 200 MW by 2030 outlined in the current IRP, to 4 360 MW. By contrast, the allocation for other solar renewables has been raised, with the allocation for concentrated solar power (CSP) increasing to 3 300 MW from 1 200 MW, and solar photovoltaic (PV) to 9 770 MW, from 8 400 MW.

Sawea CEO Johan van den Berg describes the update as a good development, owing to the need to adapt the plan to changing realities.

However, he notes that the document is somewhat ambivalent “in that the base case and the summary recommendations are at odds”.

The summary suggests that South Africa should continue with the current renewables bid programme, with additional yearly rounds of 1 000 MW for solar PV and wind and 200 MW for CSP, while also creating space for small hydro and land-fill gas.

“With wind now 30% cheaper than Medupi per kilowatt-hour there is no reason to scale down – on the contrary, we should maintain our ambition or scale up while international prices are at historical lows,” he tells Engineering News Online.

“Since the last IRP, wind power has become far cheaper and it is now comfortably the cheapest source of new, bulk electricity available. We are thus confident that the final IRP 2014 will recognise this.”

The association also expects that the final document will reflect the local content aspirations outlined in the Green Economy Accord, which highlight the jobs and industrialisation opportunities associated with South Africa’s renewable-energy programme.

“[But] should there be a scaling down it would obviously make it much harder to convince international manufacturers to set up in South Africa.”

Sawea argues that a minimum yearly procurement of 500 MW is required to stimulate the development of a domestic wind value chain.

Some localisation efforts have already been made, which has been reflected in the rising local content percentages that have emerged during each subsequent bidding round under the Renewable Energy Independent Power Producer Procurement Programme.

South African engineering group DCD is making towers in the Eastern Cape, while GRI Renewable Industries is establishing a tower manufacturing facility in the Western Cape. Cement towers are also reportedly being manufactured locally.

Van den Berg warns that, should the base case be adopted future investment will be adversely affected, while existing manufacturing facilities might be put at risk.

Windlab Africa MD Peter Venn says it would be a mistake for South Africa to retreat from the progress it has made in the renewables sector generally and in the wind sector in particular. “Wind is South Africa’s cheapest form of generation, costing as little as R0.66/kWh to produce and, crucially, the independent power producer renewable projects are being completed on schedule.”

He warns that the proposed reduction in the allocation for wind poses a significant threat to a nascent industry with “enormous” potential.

“South Africa should continue on a path towards clean, affordable power by creating an environment where wind energy can flourish," Venn concludes.

Edited by Creamer Media Reporter

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