Powering Ahead

GREEN AND CLEAN

By Fiona Wakelin

The Renewable Energy Independent Power Producer Programme

Over the last year the country’s reliance on non-renewable coal-based Eskom generated power nearly brought the economy to a standstill with rolling load shedding taking place day and night. Many people downloaded the app Eskom se Push, not only for the alerts it provided but because the name of the app represented the general public outrage at being held hostage to a nonrenewable energy source provided by ailing infrastructure.

Eleven years ago, in 2009, we started investigating how to increase and sustain private investment in renewable energy and in 2010, after the necessary legislation had been passed, the Department of Energy launched the Renewable Energy Independent Power Producer Programme (REIPPP) to enhance South Africa’s power- generation capacity. This programme encourages independent power producers (IPPs) to generate power using renewable techniques which the Government then buys for Eskom.

RENEWABLE ENERGY SOURCES INCLUDE:

• SOLAR - photo voltaic cells

• ONSHORE WIND

• HYDRO

• BIOMASS

• LANDFILL GAS

The REIPPP was also structured to contribute to broader national development objectives:

Job creation, social upliftment and broadening economic ownership.

“South Africa’s renewable energy procurement policy is unique in its emphasis on stimulating socioeconomic benefits at the local level for communities in the vicinity of renewable energy (RE) projects. In addition to potential indirect benefits for communities, deriving from procurement and construction, government policy places specific requirements on independent power producers (IPPs) to foster community ownership in the form of shareholding in RE projects, local employment, as well as annual monetary contributions to stimulate local development” - Cobenefits Study 2019.

What is an independent power producer?

An IPP is a company established by a range of shareholders to bid for the construction and operation of an independent power plant. The shareholders typically could include:

• Black industrialists

• Other South African shareholders

• Community Trusts representing the local communities where the projects are located

• Foreign shareholders

An example of IPPs

Globeleq South Africa Management Services, operates and majority owns three IPPs:

• De Aar Solar Power

• Droogfontein Solar Power

• Jeffreys Bay Wind Farm

Together these three generate enough clean renewable energy to power over 138 000 South African homes.

During construction of the three projects, an average of 2 000 people were employed on the sites from local communities and 1.5% of project revenues were invested in socioeconomic and enterprise development programmes and skills development to ensure the sustainability of the renewable energy industry.

How successful has the Programme been to date?

The Department of Mineral Resources and Energy’s Integrated Resource Plan (IRP) 2019 reported that a total 6 422 MW under the Renewable Energy Independent Power Producers Programme had been procured, with 3 876 MW operational and made available to the grid.

Electric vehicles

The global shift towards electric mobility has been a result of three major shifts – the volatility of the oil price, the COP agreements regarding carbon emission reduction commitments and overall pollution concerns.

And while South Africa does not yet have the policy framework in place for the industry to grow, if battery prices continue to fall the price of electric vehicles (EVs) will become competitive in the country. This will be a natural progression for the automotive sector which is a key contributor to the GDP.

“For South Africa, a thriving EV market supported by the robust local manufacturing capacity, holds the promise of economic growth and job creation in South Africa. It will also counteract the inevitable decline in demand for internal combustion engine (ICE) vehicles globally,” says Khanyiselo Kumalo, Energy Analyst at GreenCape. “The 2019 Electric Vehicles MIR highlights notable investment opportunities that are emerging in passenger vehicle manufacturing, electric bus manufacturing and Lithium ion battery (LIB) production,” she added.

The EV market brings with it a number of possible opportunities:

• Lithium iron batteries

• Passenger vehicles

• Electric busses

“ For SA, a thriving EV market supported by local manufacturing holds the promise of economic growth and job creation. It will also counteract the inevitable decline in demand for ICE vehicles globally.” - Green Cape