Solar developer sees project scope beyond DoE-led programme

7th December 2012 By: Samantha Herbst - Creamer Media Deputy Editor

South Africa’s much-praised Renewable Energy Independent Power Producer Programme (REIPPP) should be seen as only one part of the nation’s renewable-energy opportunity, large-scale solar power plant developer Ciel & Terre South Africa business development manager Yoann Joyeux argues.

Addressing industry stakeholders and members of the French South African Chamber of Commerce and Industry this week, Joyeux said that South Africa’s Department of Energy (DoE) was starting to replicate successful foreign renewable-energy initiatives through the REIPPP.

However, there was also an opportunity for industrial enterprises to set up their own solar plants and, eventually, for private enterprises to trade in renewables production outside of the DoE-led renewables procurement programme.

“The US and European governments have been shaping the emerging solar market by buying electricity at preferred tariffs through tenders, or feed-in tariffs,” said Joyeux.

However, solar power was becoming increasingly competitive without subsidies and there was, therefore, an emerging opportunity for business owners to diversify their energy supply even further, as a hedge against rising utility prices. Mining companies and other energy-intensive users were cited as possible beneficiaries of these types of projects.

“There are excellent funding conditions in South Africa for these [types of] projects and people don’t know about them. Eskom has a rebate scheme, the Integrated Demand Management Programme, that can finance up to 25% of the initial outlay, and banks are willing to supply loans to people working on [renewable energy] projects,” he said.

Further, South Africa can look to solar power projects implemented in other parts of the world and learn from their mistakes and successes.

The lifetime of renewable power plant operations could also be extended with alternative power projects, whereas projects running under the REIPPP are locked by a 20-year power purchase agreement with Eskom.

However, as Joyeaux pointed out, solar photovoltaic panels can last longer than 20 years. Therefore, if an energy-intensive user invests in a solar plant, it would be able to generate electricity and savings over a longer horizon.

Having worked on several local solar energy installation projects since launching Ciel & Terre South Africa this year, Joyeux said he believed that the country could become a leader in self-consumption solar power projects, with many experts stating that Europe will soon turn to self-consumption energy models as well.

“One future scenario could be that, in 30 years, the national grid will only provide power to energy-efficient users when they run short of their own self-generation product, essentially creating an energy safety net.”

Meanwhile, Industrial Development Corporation (IDC) green industries strategic business unit specialist Honey Mamabolo reported that an agreement with the French Development Agency (AFD), which was concluded in June, could help stimulate small-scale solar investments.

The AFD committed to extending €40-million to finance small-scale renewable-energy projects, as well as greenfield energy projects, through the IDC.

Mamabolo said that the IDC would be limiting the total project investment size it caters for in this funding scheme to include more projects.

“We want to provide an opportunity to both smaller developers and companies implementing small- to medium-scale renewable-energy projects,” she said.