This positive report on the opportunities for Renewable Energy in South Africa is a starting point for a series of posts that will report on developments in and linked to the use of Renewable Energy in South Africa and Sub-Saharan Africa.

Where is Renewable Energy Going in South Africa?

An almost ten fold growth in revenue from renewable energy is predicted by business research and consulting firm Frost and Sullivan’s. This emerges from their Southern African Renewable Energy Equipment Market analysis, which sees the current renewable industry in South Africa having revenues of only $28.4 million in 2008 but projects a growth to over $250 million by 2015.

Analyst Sipha Ndawonde said “The growth of the wind power market and large-scale solar concentrating projects will be driven by an increasing number of joint ventures.” He sees the driver of this growth being the “feed-in tariffs” the South African National Energy Regulator (NERSA) announced in March and currently investigating expanding. The current tariffs of 13.8 cents per kilowatt hour for wind energy and 23.6 cent per kilowatt hour for concentrated solar are considered to be amongst the best in the world

This with the government’s target of 10 terawatt hours of renewable energy by 2013, seems to make the rapid growth in renewable energy almost inevitable.

What Supports The Growth?

As well as the feed-in tariffs the report believes that “An abundance of natural resources combined with a stable political environment, reasonable economic growth rates and growing interest from private equity firms means that large-scale RE projects are set to penetrate into the southern African countries of South Africa, Botswana and Namibia.”

Additionally South Africa has an opportunity opened up by the fact that Eskom, the government electricity generator, was running into supply constraints at the start of 2008, that called for rolling blackouts. A very serious situation was only avoided by the economic downturn which brought a decrease in demand. This is therefore South Africa’s opportunity to ensure that renewables are part of the accelerated build programme Eskom are having to undertake.

What Constrains the Growth?

But there are other less positive issues that are effecting the growth of renewables in South Africa - these include the fact that the government target of 10 terawatt hours was set in 2003, that the take up of solar heating is lower than projected, solar electricity projects don’t seem to get off the ground, transport fuels projects have been halted by the “food for fuel” issue and the world economic crisis.

Eskom’s position as a long time, coal based supplier of electricity and the low calculated cost of that electricity appear to constrain development. There is pressure to move the Renewable Energy Power Purchase Agency (REPA) out of Eskom’s Single Buyers Office where it is currently housed to avoid any negative effects on the development of the industry.

Source: GO Media - Written by Dave Harcourt - Map from http://www.ez2c.de/ml/solar_land_area/ via Wikipedia under a Creative Commons license.

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corrections
written by Eric Mair , September 23, 2009

the feed-n tariffs quoted in this article are incorrect as is the government's target of 10TWh
http://www.nersa.org.za/UploadedFiles/ConsultationPapers/REFIT Phase II 150709.pdf

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