Why renewable energy is crucial to the South African grid

Wind power will play a major role in South Africa’s transition to renewable energy sources – which are expected to contribute a total of 14.4GW to the grid by 2030.

This is according to South Africa Wind Energy Association (SAWEA) CEO Ntombifuthi Ntuli, who was referring to the 2019 Integrated Resource Plan (IRP) published by the Department of Energy.

“Wind energy will play a significant role in the energy transition as it will contribute 18%  to the total power system by 2030,” said Ntuli.

“The IRP further alludes to the expected decommissioning of almost 12GW of coal power over the next decade. Wind energy will therefore be the biggest contributor in closing the capacity gap that will be created by decommissioning, thereby ensuring a stable supply of clean energy at the lowest cost,” she said.

Ntuli also noted that several projects have already been developed in order to fulfil the mandate set out by the IRP, and all that remains is submission in the next bidding round – which she expects to be issued before the end of 2020.

The importance of independent energy sources

The South African government recently gave Eskom permission to source 11,800MW of power from independent sources – 6,800MW of which must come from renewable sources.

Ntuli said the timing of this determination was perfect as it helps deal with Eskom’s capacity struggles.

“The benefit for South Africa is that we now have an opportunity to close the energy supply capacity gap that has resulted in this protracted energy crisis,” said Ntuli.

She highlighted the importance of the 6,800MW allocation to renewable sources of energy.

“Procuring 6,800 MW from renewable energy producers actually means that South Africa will attract annual investments for the duration of the determination period,” Ntuli explained.

“This is investment that the country really needs at the moment in the context of post-Covid 19 economic recovery. This infrastructure investment will yield other economic benefits for the country, including jobs, socio-economic development, localisation of equipment and production of low-cost electricity.”

Good progress being made

Ntuli and SAWEA have been impressed with the moves the government has been making to fulfil the mandate of the IRP.

“It has been our observation that government has worked very hard, even during the peak of the Covid 19 pandemic to ensure that this commitment is realised during 2020, something that we applaud as an industry,” said Ntuli.

Ntuli highlighted a number of key things that government has done to progress the energy situation in South Africa, including:

  • Two section 34 determinations were issued this year – one for procurement of emergency power and other for procurement of power from different technologies as outlined in the IRP.
  • The Risk Mitigation IPP procurement programme RFP was issued in August, procuring emergency power from various technologies.
  • Regulations have been gazetted which allow municipalities in good financial standing to procure their own power from IPPs.
  • The recent announcement by NERSA which the Minister of Mineral Resources and Energy has approved allows NERSA to process licence applications for self-generation facilities of above 1MW even if they are not in compliance with the Integrated Resource Plan (IRP 2019).
  • In June, the DMRE announced in parliament that it intended entering into agreements with existing renewables IPPs to procure 128 MW of additional energy that wind and solar farms could supply over and above what is currently allowed under their existing power purchase agreements, even though this has not yet materialised.
  • Recently, during the debate on the economic recovery plan, the DMRE Minister Gwede Mantashe confirmed that the REIPPPP bid window 5 would be issued in December 2020.

Ntuli said that over and above the above, DMRE minister Gwede Mantashe has created a renewable energy engagement forum which allows the renewable energy community to engage with the DMRE on a regular basis.

Additionally, Ntuli said it is encouraging that public enterprises minister Pravin Gordhan has articulated government’s intent and commitment to implement an Independent Transmission Grid System and Market Operator (ITSMO), while ESKOM CEO Andre De Ruyer has made positive moves regarding renewable energy.

“Eskom’s CEO, Andre De Ruyter, recently affirmed the role of renewable energy, mentioning that the technology will have a place in Eskom’s portfolio as it can bring capacity into the grid faster, reliably and cost-effectively in order to close the capacity gap that will be created by decommissioning of 10000 MW of coal over the next decade,” Ntuli explained.

“He further alluded to the availability of ‘Green Financing’ as a vehicle for investment and specifically to draw finance to the decarbonisation of the country’s national grid, in order to make ITSMO a reality.”

Ntuli said that renewable power is key to the plan to rebuild South Africa – both in terms of its energy grid, and in terms of the economy at large.

“We are therefore encouraged that our sector is being recognized for its delivery of clean power that is affordable, as well as wind and solar’s ability to be delivered within an 18-24month period,” she said.

“Additionally, clean technology is seen to be offering hope for our country to meet energy demand on a localised level and even fulfil our international obligation to decarbonise our power sector.”

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Why renewable energy is crucial to the South African grid