Magazine article Foreign Policy

The Greening of South Africa: Close to Half the New Energy Capacity South Africa Plans to Commission between Now and 2030 Will Be from Renewable Sources

Magazine article Foreign Policy

The Greening of South Africa: Close to Half the New Energy Capacity South Africa Plans to Commission between Now and 2030 Will Be from Renewable Sources

Article excerpt

Business leaders surveyed last year by management consultants AT Kearney said they had more confidence in South Africa as an investment destination than they did in many western European countries and emerging powerhouses like Chile and Malaysia.

One reason was Pretoria's much lauded renewable energy program which in the view of London-based risk analysts IHS has made South Africa "the world's most attractive country for solar energy" investment. As a destination for investment in all forms of clean energy, Bloomberg New Energy Finance currently ranks South Africa third behind China and Brazil on its Climatescope index of 55 countries.

Since late 2013, a growing fleet of solar and wind power projects has begun feeding hundreds of badly needed megawatts into South Africa's national grid. This is the start of a carbon-free energy revolution that will, under current plans, see 42 per cent of all new generating capacity commissioned between now and 2030 - 17 800MW of 42 539MW - fueled by the country's abundant sun and wind.

Driving the revolution is South Africa's Department of Energy (DoE) and its groundbreaking Renewable Energy Independent Power Producer Procurement Program (REIPPPP). The department is inviting consortia to bid on the supply of 6 925 MW (equivalent to about 15 per cent of current national capacity) using a range of renewable technologies--primarily solar photovoltaic (PV), which converts sunlight directly into electricity, concentrating solar (CSP), which uses the sun's rays as a heat source, and wind turbines. Small hydro, landfill gas and biomass are also in the mix, but on a much smaller scale.

Bids are initially being solicited in a series of five reverse auctions, the last scheduled for next year. So far there have been three rounds, resulting in 54 deals with an investment value of $10 billion. The foreign portion of the funding assembled by successful consortia in round three was just under $1.5 billion, mostly in the form of equity, according to DoE.

Many of the projects selected in the first round at the end of 2011 are already supplying power to the grid. Among them:

* A 96MW, $260 million PV facility at Jasper near Kimberly, built and operated by Santa Monica-headquartered SolarReserve. Commissioned last October, this is the country's largest PV project to date. Google has a $12 million equity stake.

* Two 75 MW PV farms, also built and run by SolarReserve at Letsatsi in Free State province and Lesedi in the Northern Cape. …

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