The local wind energy industry is “eagerly anticipating a growth phase”, as the approved Integrated Resource Plan 2019 allocates 14.4 GW of wind power that needs to be added to the local energy mix from 2022.
“This requires government to move swiftly in announcing the next round of procurement to create investor confidence in the wind energy industry, as well as address the current energy crisis in the country,” says South African Wind Energy Association CEO Ntombifuthi Ntuli.
Since the local wind energy industry started about ten years ago, it has played a role in four rounds of energy procurement in the Department of Mineral Resources and Energy’s (DMRE) Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
The DMRE’s Risk Mitigation Independent Power Producer Programme (RMI4P), was also launched this year to procure 2 000 MW of new generation capacity.
Currently, the local wind energy industry has 1 980 MW of installed capacity that is operational and feeding energy to the local energy grid.
Ntuli states that the wind energy industry is close to reaching commercial operation for an additional 1 363 MW capacity from 12 projects that started construction in 2018.
She claims that the most significant opportunity to capitalise on this growth lies in the realisation that the wind energy sector can reduce the cost of energy, thereby improving the country’s energy competitiveness, and help deliver needed power to “kick-start the economy post Covid-19”.
The sector has demonstrated its potential to reduce the cost of energy through a reduction in wind energy tariffs – from R1.14/kWh in the first bid window (BW 1) of the REIPPPP to R0.62/kWh in BW 4.5.
“The industry anticipates an even further tariff reduction in future bidding rounds, making wind the cheapest energy source in the local generation mix.”
Ntuli points out that the DMRE issued a request for proposals in August for new generation capacity under the RMI4P. This request invited interested parties to register prospective bids.
Further, Mineral Resources and Energy Minister Gwede Mantashe stated on September 10 that the National Energy Regulator of South Africa had provided its concurrence with a Section 34 Ministerial determination, which was issued in February, allowing for the procurement of 11 813 MW of new electricity capacity.
Mantashe added that this would open up various bid windows, including BW 5 of the REIPPPP for renewable energy.
Meanwhile, Ntuli explains that the RMI4P creates an opportunity for the renewable-energy industry to be “more innovative in structuring energy-related projects to deliver flexible generation that provides energy, capacity and ancillary services”.
Ntuli says the need for more flexible energy generation could encourage the implementation of more hybrid energy projects.
These hybrid systems use renewable sources, such as wind and solar photovoltaic (PV) energy, battery energy storage systems and even gas technology.
She adds that such projects can also assist in meeting generation requirements while “blending the costs of all of these technologies to propose the lowest possible tariffs”.
Further, the RMI4P is flexible enough to allow for the use of hybrid energy projects that do not need to be physically colocated.
This is vital, she adds, as renewable-energy projects are geographically located in areas with ideal solar or wind resources, land availability and grid connections.
Only battery storage needs to be located on site with the generation plant.
“An advantage of renewable-energy hybrid systems lies in their ability to combine two of the fastest growing renewable-energy technologies. Hybrid systems can also take advantage of the complementary nature of solar PV, which produces power during the day, and wind, which produces most of its power at night.”
She adds that during times when the wind or solar systems are not generating power, hybrid systems provide power through batteries. If the batteries run low, the generating plant can provide power to recharge the batteries. The battery capacity needs to be large enough to supply electricity during non-charging hours.
Further, adding battery storage to a renewables-only hybrid system essentially doubles the generation capacity of such a system.
Hybrids enhance the reliability of the power generation system, and do not require grid expansion, as hybrid grids produce power at different intervals and during complementary seasons.
“Further, the size of the battery can be minimised, as the hybrid system relies on more than one method of power production.”
Ntuli also points out that battery storage used in hybrid systems is rapidly declining in cost, making it more viable and cost effective.
“While we finalise these projects, it’s important to have continuity in energy procurement. This can help retain the jobs created in the sector and maintain demand for local manufacturing facilities that were established in response to the local-content requirement in the previous bidding rounds,” she concludes.