South Africa’s economy has had to deal with bouts of load-shedding since 2008 while the procurement of new renewables capacity under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was delayed for a number of years, but renewable energy company Dornier-Suntrace is optimistic about the country’s clean energy prospects going forward.

CEO Boris Westphal, who has been involved in the local renewable energy industry since 2010, says the REIPPPP was one of the most successful energy auction programmes globally up to 2014 when it was stalled.

The period that followed saw no movement in terms of new renewable energy builds, which hit the local manufacturing industry hard. However, Westphal lauds government's reinvigorated drive since 2019/20 to get projects going again.

He warns that the low prices quoted in bids for the fifth bid window of the REIPPPP may pose a problem since system costs have since increased and “many of those bidders may struggle to make it to financial closing and may need another ‘correction’ round of project bidding”.

He also believes the 100 MW licence exemption gazetted by government in August 2021 bodes well for industry, particularly mining, where the company sees buoyant appetite for renewable energy builds.

Responding to how South Africa’s “ease of doing business” in the energy space compares with the rest of the African continent, Westphal notes that the country is undeniably ahead of most.

“South Africa has many requirements and regulations, such as those related to black economic empowerment, which is often foreign for international developers and investors, as well as high local content requirements, which regularly lead to higher equipment costs,” he explains.

Nonetheless, he says, the country is excellently set up for renewable energy, with industry expertise and suppliers at the ready.

Weighing in on South Africa’s unique considerations and opportunities in terms of technology, Dornier-Suntrace head of engineering Lukas Haack lauds the country’s abundant access to renewable energy resources – particularly wind and solar – and cost competitiveness of the technology.

“There is potential to significantly increase the renewable energy capacity share in the grid. A challenge is introduced, however, when considering grid management.”

Currently, renewable energy comprises 8% of the South African energy mix. The Integrated Resource Plan envisions 85% renewables on the grid by 2035.

Haack and Westphal agree that greater clarity is needed from State-owned power utility Eskom on how the grid will be supported when more of these projects come on stream, as well as about grid access.

GLOBAL IMPACTS

Turning to how the Russian invasion of Ukraine has impacted on the energy industry globally, Westphal stresses that the rise in system costs, which started in 2020 when Covid-19 resulted in many economies implementing lockdowns, has been exacerbated.

Certain supply chains will be disrupted, he emphasises, but it is not yet evident what products or countries will be hardest hit.

Westphal believes the conflict is serving as a driver for renewable energy transitions globally, since countries want to reduce their dependence on fossil fuels from the regions in question – oil and gas prices and supply are particularly volatile at this time.

Haack adds that despite the recently higher steel, copper and lithium prices, which impacts among others on battery manufacturing, as well as limited availabability of solar PV modules, customers will still get supply of renewable energy-related components, albeit at longer lead times.

“We expect this reduced availability and higher prices to continue throughout 2022, but eventually balance out by next year and lead to normalisation of renewable energy component prices.”

MINING

Highlighting where Dornier-Suntrace is seeing particular uptake of renewable energy, at industry-level, Haack points out that mining has become a frontrunner.

He explains that mining companies are significant consumers of electricity and it, therefore, makes sense for them to invest in the lowest-cost energy technologies.

Importantly, renewables also contribute to mines’ decarbonisation goals.

Dornier-Suntrace, together with renewable energy company BayWa r.e., in April 2021 commissioned one of the world’s largest off-grid solar-battery hybrid systems for the mining industry as the engineering, procurement and construction management contractor.

The 30 MW solar photovoltaic and 15.4 MWh battery storage plant at global miner B2Gold’s Fekola gold mine, in Mali, allows up to 75% of the electricity demand of the mine to be covered by renewable energy during the daytime. It is saving B2Gold 13-million litres a year of heavy fuel oil and lowers carbon dioxide emissions by about 39 000 t/y.

The company is advising many mines building renewable energy into their power supply systems and expects many more to be commissioned in the coming years.

Haack clarifies that a rebranding process will soon see Suntrace officially being renamed Dornier-Suntrace.