South Africa target still 'lacks ambition'

SOUTH AFRICA: South Africa plans to dramatically increase its target for installed wind power capacity to 4.5GW by 2019, according to the draft Integrated Resource Plan (IRP) released for public consultation in October.

The previous plan called for at least 1.03GW of wind energy online by 2013. While the industry sees the new target as an encouraging sign that the government is starting to take wind seriously, many argue it lacks ambition. "We would like to see a much bolder, longer-term vision with more renewables, but it's a good starting point," comments Davin Chown, director of Ireland-based Mainstream Renewable Power's South Africa operation.

The IRP will detail how anticipated electricity demand over the next 20 years should be met in terms of generating capacity, technology, ownership, timing and cost. The preferred scenario outlined in the draft foresees total wind capacity amounting to 4.5GW by 2019. From 2019 to 2030, a further 7.2GW of renewable capacity would be added, bringing the share of renewables in the country's overall generation mix to 16%. Coal's share would decline from over 90% today to 48%.

The Department of Energy (DoE), which drew up the IRP, considers this is a "fair and acceptable balance", given such issues as funding, carbon emissions, job creation and security of supply. However, as an indication of what wind power could achieve, state utility Eskom announced in September that it had received initial applications for grid connection for just over 13GW of wind energy projects. Furthermore, a recent survey by the DoE revealed renewable energy projects totalling around 22GW at a reasonably advanced stage of planning. The bulk of these concern wind power.

Chown and other developers also maintain that the proposed scale-up for wind power under the IRP will not be sufficient to stimulate a local industry and jobs. "Wind turbine manufacturers need a longer line of sight. They need it to be a little bolder," Chown argues.Another reason why the government should be more ambitious with wind power is the looming electricity shortfall, Chown says. The DoE warned in September that rolling blackouts are likely in 2011-16 unless extraordinary steps are taken. The report recommends mobilising private-sector investment in new generation, including renewables.

For that to happen, the government must remove a number of constraints as soon as possible, including red tape and uncertainty on policy, prices and contracts for prospective investors.

While South Africa introduced a generous feed-in tariff for wind power some 18 months ago (Windpower Monthly, May 2009), a number of crucial elements are still not in place. These include a standardised power purchase agreement (PPA) and agreed selection criteria. Equally important is establishing the impartiality of Eskom as the designated single buyer, ahead of creating an independent system and market operator.

Once these issues are resolved, Eskom will be able to start issuing requests for proposals for the first 1.02GW. Around ZAR12.8 billion ($1.86 billion) has already been set aside to cover the associated feed-in tariff, while the national treasury is reportedly considering guaranteeing the PPAs, which will be valid for 20 years. A revised plan will probably be submitted to the cabinet early next year, for promulgation within the first quarter.