Since renewable-energy feed-in tariffs have decreased over the last few years – 35% and 78% for wind and solar respectively since 2008 – project owners are paying more attention to the competitive advantage they gain by focusing on economic development (ED) targets, such as increasing the number of local people employed, says juwi Renewable Energies MD Greg Austin.
Primary ED improvement efforts revolve around local content and job creation which, combined, account for 50% of the ED score. In respect of the Renewable Energy Independent Power Producer Procurement Programme, which sees chosen projects feed electricity into the national grid, projects have been awarded 70% on tariff and 30% on ED.
“Since there is little difference in tariffs between bidders, we must differentiate ourselves by increasing ED and, one strategy is to fully integrate the local community into the projects,” Austin notes.
He adds that renewable energy has contributed massively to foreign direct investment, industrialisation and economic growth in South Africa.
“In our most recent project, the Mulilo-Sonnedix Prieska PV3 Solar, which reached commercial operation in August 2016, the key element of our strategy that led to juwi being selected as the service provider for the project was the high level of employment of the local community in constructing this 86 MW solar plant in the Northern Cape.”
“Over 50% of the people employed on the project . . . were from the Siyathemba local municipality. At the same time, we achieved 69% of the total project value being spent in South Africa, both in the form of construction contractors and equipment suppliers,” he said.