Wind power could meet 20% of South Africa's electricity demand by 2025, providing that there is a favourable regulatory regime, says the South Africa Wind Energy Association (SAWEA) in a report submitted to help draw up the country's second integrated resource plan. This rolling, reviewable framework sets out the electricity generation mix for the next 20 years.
According to the association, the grid can accommodate 6GW of wind energy without significant upgrading - and that around 5GW could be operating by 2016. With grid upgrades, this could grow to 30GW by 2025.
While this is a huge leap from the negligible 10MW currently turning in South Africa, the country's wind resource is estimated at over 50GW. And, according to SAWEA, 28 local and international developers have applied to state utility Eskom for grid connections for more than 10.5GW power. The rush was sparked by the introduction last year of a generous feed-in tariff of ZAR 1.25/kWh (EUR0.134/kWh) for 20 years (Windpower Monthly, May 2009).
But before anyone can apply for the tariff, the industry wants clear rules setting out how projects will be selected, if some form of buying limit is introduced as seems likely, and who the buyer will be. At present, Eskom acts as both producer and buyer of electricity, raising concerns over conflict of interest, such as how it will allocate access to the grid. It now seems probable the government will establish an independent system and market operator to act as a single buyer. Initially, it will sit as an independent organisation within Eskom, eventually evolving into a separate body, the government says.
Some details of the procurement process are also becoming clearer. Davin Chown of Ireland-based Mainstream Renewable Power says that, in August, Eskom's single buyer's office (SBO) will launch a pre-qualification round for independent power producers. By early November, possibly, the SBO will invite successful candidates to submit bids, giving them the connection agreements, power purchase agreement (PPA) and a map of all substations and associated costs, he says.
The next question is how much the SBO will buy. Under the first integrated resource plan, the government must have 1.025GW of wind power up and running by 2013 and, while the end figure may be higher, says Chown, it will still fall far short of the 10.5GW of grid applications. Like all major developers with projects in late-stage development, Chown says Mainstream Renewables will be pushing hard to secure a place in the first round. The company already has planning consent for the first 16 turbines of a proposed 165MW facility at Jeffrey's Bay in Eastern Cape province, plus over 3GW under development.
Umoya Energy of Cape Town has progressed a 100MW project at Hopefield, Western Cape province and, once the PPA is signed, it could be operational within 12 months, the firm says. Before that, however, Electrawinds of Belgium will complete its 45MW Port Elizabeth facility at Eastern Cape. The company will not have to wait to sign a PPA under the feed-in tariff, but is negotiating to sell its output to a third party under what is called the "willing seller, willing buyer" system. The first Vestas 1.8MW unit was installed in time to power the town's football stadium during the World Cup.