SA wind energy industry reaffirms commitment to energy security
As the country bears the weight of continued load shedding, the South African Wind Energy Association (SAWEA), has reaffirmed the sector’s role in delivering energy security. This is despite the recent announcement of delays of two renewable energy procurement rounds meant to unlock and deliver new generation capacity.
Responding to a recent statement issued by the head of South Africa’s Independent Power Producer Office (IPPO), Mr Bernard Magoro, the Association says it is encouraged by the leadership demonstrated and the sentiments of stakeholder alignment. SAWEA has been lobbying for increased stakeholder engagement and alignment, as it is the key to establishing the foundation for accelerated procurement and unblocking hurdles.
“We continue to build relationships with the key stakeholders including the IPPO, Eskom, Department of Trade Industry and Competition (dtic) and Department of Mineral Resources and Energy (DMRE) and are assured that the stakeholders are having the right conversations to support the procurement process with the aim of more megawatts on the grid as quickly as possible,” said Niveshen Govender, CEO of SAWEA.
The South African wind power sector is robust and has the appetite, ability and capacity to deliver (at least) 1.6GW of new power generation per year, for the next decade. This has been demonstrated by exceedingly high levels of bid submissions for BW5 and reaffirmed by Magoro this week, who stated his confidence in the market appetite for the Renewable Energy Independent Power Producer Procurement Programme’s BW6. He noted that more than 50 potential bidders have acquired the bid documentation, and furthermore that the National Treasury has confirmed that the programme will continue to be granted government guarantee.
The Association points out that the sheer scale of these mega-projects, valued each on average over R1.5billion investment, require a slew of work to bring them to commercial closure. Commercial close is when the project agreements are signed, which is basically the achievement of the necessary power purchase agreement to sell electricity with Eskom and the implementation agreement with Government, which determines how Independent Power Producers (IPPs) will implement their projects and what economic development goals will be achieved.
“We are dealing with billion-rand projects that require in excess of sixty applications, licences, permit agreements, regulatory compliance processes, which demonstrates the importance of cross-sector stakeholder relations and supportive policies,” added Govender.
Citing the recent procurement round delay from end-April, the Association has pointed out that the failure to secure final budget quotes from Eskom for grid connection, shouldn’t be singled out as the only reason for postponements. It is suggested that a six to 12-month timeframe may be more realistic to navigate the cumbersome processes.
“I estimate around 12 months is a more realistic timeframe, which should be incorporated into the procurement process to reduce the public perception of delays, in addition to increased stakeholder engagement to resolve this,” reiterated Govender.
When asked about the comments made by the African Independent Power Producers Association Chairperson, SAWEA, has stated that it prefers to engage key stakeholders directly and work through the challenges in a constructive manner.
“South Africa can address fundamental challenges of energy access, energy security and climate change through the deployment of renewable energy. For this to happen, it is best that all stakeholders move towards working better together to achieve this,” concluded Govender.
Gav Hurford, National Control Manager: System Operator, Transmission, Eskom
There are multiple layers to understanding load shedding. It begins with South Africa’s power system value chain: generation, transmission and distribution (transporting electricity to the consumer), and customer services. A centralised control is needed to keep the power system stable.
In general, bulk electricity cannot be stored. It must be generated at exactly the same time it is consumed. The System Operator manages the supply/demand balance at every second.
There is very hierarchical control of the high voltage power system, with instructions moving top down from national control (765-132 kV) to regional control (132-66 kV) and finally local control (66-11 kV), such as municipalities. Hurford says: “There is no ‘big red button’ in the National Control Centre (NCC) that we hit to start load shedding. It’s a lot more systematic than that.”
South Africa’s NCC operates parts of the network in Swaziland and parts of the network in Mozambique. Hurford says there are plans to make the NCC a separate entity outside of Eskom.
National Control Centre and the supply/demand balance of 50Hz
The System Operator is part of the NCC and the NCC is responsible for the overall wellbeing and real-time operation of the entire power system. In general, this means:
Dispatching available generators to meet demand or reducing demand to match the available generation (eg load shedding). If there’s too much demand and not enough power generation, the whole system starts to slow down ie the frequency starts to drop. This puts the network in jeopardy. Typically the network should run at 50Hz or close to it. Hurford says that this supply/demand balance of 50Hz relates to the generators’ mechanical capabilities. South Africa’s large coal-fired generators must remain running at or close to 50Hz.
Managing maintenance outages of the vast transmission network. The South African network is interconnected from Cape Town up to the Democratic Republic of Congo, and from Namibia across to Maputo. These all run at the same frequency of 50Hz. The bigger the grid, the more stable it tends to be. However, it also means the countries are “locked in and share the same fate”, says Hurford. South Africa’s Eskom operates the largest system. According to the 2019/2020 Southern African Power Pool (SAPP) statistics (sapp.co.zw), the maximum demand was 38 897 MW. Next highest was Zambia with 2 237 MW. It’s clear that South Africa won’t receive a lot of help from its neighbours.
Controlling the power system to maintain stability.
Green rows: the two Independent Power Producers (IPP) and these are open cycle gas turbines (OCGT) which burn diesel.
Grey rows: renewables that have been added to the power grid since 2015 (about 560 MW). The bulk of these are wind generation, solar PV (photo voltaic, like solar panels) and CSP (concentrated solar power).
Hurford says that South Africa already has significant amounts of renewable energy (RE) on the grid. Typically, during the week there is a contribution of 12% and there have been contributions of over 20%.
Grid Code and maintaining the 50Hz supply/demand balance
The South African power industry is governed by the Grid Code, a National Energy Regulator of South Africa (NERSA) suite of documents. It lays out what licensees (participants in the power system) can and can’t do, what is expected of them technically, and what to do to maintain the stability of the power system. It includes what to do in a power crisis.
The frequency of the power system needs to stay within 49Hz and 50.1Hz. In that range, generators should operate continuously. Grid Code Level 1 restrictions occur when the frequency drops by 0.5Hz (49Hz-48.5Hz). A large generator only tolerates this for about 80 minutes over its lifetime of 30 years.
Automatic tripping starts at Level 2 (48.5Hz-48Hz). Here the lifetime tolerance is about 10 minutes, operating for one minute in this range. Each consequent level shows a 0.5Hz drop with automatic tripping after a very short time.
Below 47.5 Hz it becomes chaotic, says Hurford. Generators will then automatically trip off to protect themselves and there will be a cascading situation. As more generators trip off, there is less capacity available to supply the demand and the frequency drops even further. This results in the tripping of every generator connected to the power system and a national blackout. (Note that there are other causes for large and national blackouts beyond lack of generation capacity, including faults on the transmission system.)
To maintain the supply/demand balance, Eskom uses a range of options:
During normal system operations. The base load power and self-dispatched generation comes from nuclear, coal, IPPs, and Eskom’s RE.
As demand increases within normal system operations. Eskom uses more RE. There are also various products. Examples include specific customers switching off their plant or part of a plant, as well as contractual agreements where Eskom can interrupt demand. The benefit of these products is rapid response. (It’s quite a slow process to ramp up a large coal fire station – about 8 MW per minute – for example.)
At highest peak duringnormal system operations. There is a country response with calls to reduce load ie the ‘power alert’. Hurford says that the public does respond and the impact can be significant. “We can get about 275 MW response if we haven’t shed for a while,” he says.
System Emergency. This is declared in terms of the National Code of Practice (NRS048-9). It’s a document adopted by industry and approved by NERSA. It sets out a systematic way of load shedding, from the System Operator declaring a system emergency to load shedding stages and further. The third edition is currently being developed. The guiding principle of NRS048-9 is that all participants be treated equitably. This does involve ensuring essential services meet criteria, like hospitals having back-up generators. NRS048-9 allows for very specific circumstances – if something critical is happening – where power is not interrupted.
After System Emergency. There is large customer and international load curtailment, scheduled load shedding (stages 1-8), and unscheduled load shedding. Load curtailment means load reduction from customers who can reduce demand on instruction. Load shedding is load reduction from disconnecting the load at selected points on the transmission and distribution network.
Beyond stage 8 load shedding. Hurford says there are contingency plans if South Africa needs to go beyond stage 8, such as large blocks (towns and cities) dropped off the network plus more. The aim is to prevent a total power system collapse.
Impact of national blackouts
Planned and unplanned load shedding is part of the solution to avoid a national blackout. So far, South Africa has not had a full national blackout. However, there have been a number around the world. Hurford says the one in March 2019 in Venezuela drew many parallels with South Africa. They have a similar system and the cause was poor maintenance. Venezuela was down for around five months.
The impact in Venezuela included: looting, running out of water, the inability to process sewerage, people dying at hospital (no electricity for essential equipment), business interruption, the inability to keep food fresh, and much more. There was an impact on almost every single part of daily life.
There are other considerations with a national blackout. Hurford says the telecommunications backbone would fail in about eight hours. Another example is the impact on available liquid fuel. While it’s used to power so much, it also needs powered storage. Just moving around the country would become severely limited.
South Africa’s system design includes contingency plans and capabilities to deal with a blackout. There are Black Start capabilities to restart the power grid.
Understanding our emergency reserves
Emergency reserves provide a limited amount of energy and are only available for a short duration. There is also an ongoing need to replenish emergency reserves. The cycles become clearer when looking at pumped storage and open cycle gas turbines (OCGTs).
Pumped storage schemes involve water stored in an upper reservoir and then released to drive turbines that generate electricity. The water ends up in a lower reservoir. At night, excess energy allows the water to be pumped back up. It’s a 168-hour cycle so reserve power is not easily restored. Hurford says that pumped storage is about 75% efficient but offers the only viable means of storing large amounts of energy. South Africa has three pump storage stations.
South Africa has 20 OCGTs and Eskom owns 14. These cost about 10 times more than coal to run, using almost 1900 litres of diesel per minute per generator. The cost is excessive. Beyond that, it’s not even possible to move diesel fast enough to these generators.
Between pumped storage, OCGTs, and gas turbines, Eskom is able to dispatch almost 6000 MW, making up the majority of the emergency reserves.
Managing a constrained power system
“We’ve had to manage the power system very differently from the traditional way,” says Hurford. “Obviously we need to do maintenance on generators but we can’t shut them all down. We are forced to do maintenance as and when we can.”
Managing the systems involves Eskom teams doing scenario planning, looking at installed generation capacity, plant unavailability, the demand forecast, planned outages for maintenance, and potential unplanned outages. Eskom works with three scenarios at any given time. Even with this planning, the system is volatile and unreliable. It “makes giving the country certainty absolutely impossible”, says Hurford.
However, the system is continuously monitored and, where there is enough time, Eskom gives the country as much warning as possible. Note that Eskom is fully mandated to do whatever is required to get the power system stable even if there’s no time to give a warning. Hurford says he knows there’s anger around load shedding and consumers have a right to be angry. He also hopes that understanding the situation in more detail will ease the frustration.
What happened? Load shedding in South Africa and how to fix it
Dr Jarrad Wright, National Renewable Energy Laboratory (NREL), USA
South Africa’s power system is in crisis with urgent action needed to ensure system adequacy while simultaneously creating a cleaner and more diversified long-term energy mix. So says Dr Jarrad Wright when he presented on ‘What happened? Loadshedding in South Africa and how to fix it’. He was, until recently, at the Council for Scientific and Industrial Research (CSIR) and is now at the National Renewable Energy Laboratory (NREL) in the USA.
Wright says there is a worrying trend of a continuous increase in load shedding. There has also been a shift from equal levels of planned maintenance and unplanned outages in 2017 to more unplanned outages at higher levels as the years progress. This means there’s limited space to do planned outages and maintenance. He says, “There is still a lot that needs to come into play until we get an adequate power system over the next two to three years.”
To reduce load shedding and increase power generation, his recommendations include enabling regulations and institutional capacity for customer response at scale (power self-supply) to all customer segments. Wright says South Africa also needs to accelerate the augmented Department of Mineral Resources and Energy (DMRE) Risk Mitigation Power Procurement Programme. All things need to be done in parallel including implementing the Integrated Resource Plan (IRP) 2019 now. This is so there is sufficient time for lengthy procurement processes, technology specific lead times, and so on.
The case forrenewable energy
Prof Frik Van Niekerk noted that we have a growing population and a growing energy need. At the same time, there is an unreliable energy supply and the burden of the climate crisis. The current renewable energy (RE) use is too low and he says our future planning is insufficient. Van Niekerk presented on ‘A compelling case for fast tracking variable renewable energy in South Africa and the region’. He is from the Unit for Energy and Technology Systems, Faculty of Engineering, North-West University.
Van Niekerk says that we need a strategy to accelerate the green energy trajectory. He recommends deregulating and deploying RE of which there is an abundance in South Africa and Africa, ensuring a fair energy transition, and recognising the lowered cost of RE and storage technologies.
She notes that it’s a false binary to pit concern for the environment against employment. The energy landscape in South Africa must transition, not just because of loadshedding. In a time of climate change, fossil fuel-driven energy is a justice issue, particularly for vulnerable and disadvantaged communities. (Note that according to World Bank data, South Africa is the 13th highest greenhouse gas emitter in the world.)
Tommy Garner presented on ‘The perspective of independent power producers’. He is Business Development Manager at Earth and Wire, and the Chair of the Independent Power Producers (IPP) Association. Garner notes that Eskom operates an ageing generation fleet, with more than half of the stations over 37 years old. Replacement and refurbishment of major components mean extensive outage time and is costly.
He says the significant increase of unplanned outages over time shows the low reliability. “You don’t know when it’s going to break down,” says Garner. This makes it difficult to plan for maintenance.
Obstacles torenewable energy
Van Niekerk looks at what is holding us back from more RE. He says that IRP2019 still has too much coal in the energy mix and the idea of ‘new coal’ should be avoided. IRP2019 isn’t ambitious enough and there’s insufficient attention to storage. Deregulation is needed, as well as a more distributed small-scale generation rather than just a centralised system. He emphasises more urgency around RE, including prioritising it within the highest offices of government.
He doesn’t believe the problem to be technological but rather around political considerations. These include Eskom debt liability, labour politics, gate keeping, and procurement issues. Garner agrees with him.
Garner explains that when new technology gets to the point of lower costs, this drives more demand in the RE sector. (RE costs are now up to 45 times cheaper over the last 10 years while coal, nuclear and carbon capture are not reducing in cost.)
With more demand in the sector comes more production investment and more supply – which in turn drives lower costs. This feedback loop continues, with more infrastructure investment and more government support. This then drives better capability and more public acceptance. It also drives less demand of older technology.
Garner says that this was happening in 2010 when government added RE into the energy mix. There was also investment in the IPP office, and the Renewable Energy and Energy Efficiency Partnership (REEEP) programmes were very successful.
However, in 2014, these positive causal feedback loops came to a halt. As part of state capture and the Gupta family intervening in Eskom, government supported the fossil fuel industry, says Garner. Agreements for REEEP weren’t signed and the programme started to fall over. There was less infrastructure investment and less government support in RE. Garner says this also led to IRP2019 including coal.
All of this has resulted in a stop-and-start process.
Garner says South Africa needs between three to five times our current generation capacity with variable renewable energy (VRE) and between 35-90 hrs of battery storage. We can then go to a complete VRE system.
Hurford does note that, when planning power grids, we need to keep in mind the ‘one in 10 year’ event where there is no wind or sun to maintain stability of the network.
Garner recommends updating IRP2019, especially regarding battery storage, prioritising investment in grid infrastructure, and government pushing through the unbundling of Eskom and supporting RE and IPP, among other things. He also sees deregulation as a significant driver.
Prof Roula Inglesi-Lotz, South African Association for Energy Economics (SAAEE) and Department of Economics, University of Pretoria (UP) presented on ‘The impact of electricity shortage on South Africa’s economy’. Among other things, she shows the effects of electricity supply on attracting Foreign Direct Investment and the need to stabilise the energy supply.
Prof Xiaohua Xia from the Department of Electrical, Electronic and Computer Engineering, University of Pretoria (UP) and Director: Centre for New Energy Systems, UP presented on ‘Go solar’. He looked at an off-grid PV system that is being piloted at the university, suitable for rural and urban environments.
“The City of Cape Town will be considering proposals from IPPs for projects between 5–20 MW that will allow us to access an affordable and reliable electricity supply. Especially those that are able to help us reduce our reliance on Eskom during peak times of use. We will consider proposals from a range of projects, including generation-only projects, generation-plus-storage projects, and storage-only projects.
“It is crucial to the City that we are not only able to keep the lights on during off-peak times, but that we are able to supply households and businesses with electricity when demand is at its highest.” City of Cape Town Mayor
Hill-Lewis said energy security means businesses succeeding. Energy security means more jobs. Energy security means meaningful economic recovery and growth.
MMC for Energy Cllr Beverley van Reenen said the the municipality has shown its commitment to energy security.
“The City has done so by working flat out to ensure we get IPP projects up and running as soon as possible. We cannot afford to wait any longer than necessary to ensure Capetonians have reliable and affordable access to electricity.” MMC for Energy
Mineral Resources and Energy Minister Gwede Mantashe said he would not stand in Cape Town’s way.
There has been much debate around the removal of the local-content requirement on aluminium frames for photovoltaic panels by the Department of Trade, Industry and Competition (dtic). The decision has caused questions to be asked of dtic but should also motivate the industry and government to reflect on what local content really means.
By Niveshen Govender, COO, SA Photovoltaic Industry Association
Looking back at the progress we have made since the 2011 launch of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), I can see so many positives.
Recognising that our own local industry was not able to fully realise the ambitious programme targets, government took an innovative stance that was designed to leverage foreign expertise but also provide South Africa with the opportunity to become a major manufacturer of componentry of renewable energy projects.
The local content requirements of the initial Bid Windows of the REIPPPP stipulated a certain percentage of local content and have resulted in several technology and component manufacturers establishing local manufacturing facilities.
According to the IPPO quarterly report, Black South Africans now hold 33% of the shares across the complete supply chain and local communities hold 9% equity in the Independent Power Producers (IPPs) of Bid Window 1 to Bid Window 4.
To date, the R58.5-billion local content spend reported by active IPPs is already 89% of the R66-billion local content expected. This is with 20 projects still in construction, and 71 of the 91 active projects having reached Commercial Operation Date (COD).
All this is to be lauded. However, as I reflect on progress, I must ask, what exactly is local when it comes to local content requirements?
As with everything in life, there is often a happy medium between opposing viewpoints. And this might be an appropriate time to reassess what it is we want from local content requirements as we embark on another decade of renewable energy procurement.
Our definition of local should of course be aligned with government objectives to increase domestic employment through increased industrialisation. But local content should also lead to an enhanced skills base that leads us to leverage foreign expertise to improve the knowledge of our local workers and enable them to add value across the solar PV value chain, not just through manufacturing and construction and in the process, hopefully develop globally competitive products.
Renewable energy provides us with an opportunity for industrialisation. SAPVIA is fully supportive of localisation that builds industry in South Africa in line with the national policy. The framework must support fair and transparent opportunities to both local manufacturers and foreign investors.
There are several solar PV system components that could be locally manufactured if the right conditions are put in place. Add the untapped potential across the African continent which we could look to manufacture for the region and not just South Africa.
All of this must be done responsibly and sustainably, with an eye on balancing the immediate needs of the sector while encouraging investors and incentivising viable local businesses and industry.
A refocus on what local content requirements can only be done through open consultation both nationally and internationally, working with private industry and government to ensure that we have empirical, data-based research as the cornerstone of any plan.
Local content calibrations should begin with an assessment of existing local capabilities and the market potential, while keeping an eye on the planned roll out of capacity – mainly, the IRP 2019.
Going forward, we are keen to continue working with the dtic and other organisations representing the renewables and manufacturing sectors to fully understand the local market potential, currently, and what it can grow into. Only through research and consultation will we be able to chart a forward trajectory that supports increased investment in industrialisation and fosters healthy local competition.
SAPVIA is working hard to create an enabling environment that supports manufacturers. We have reconstituted a Manufacturing Working Group, for both members and non-members, which has representation from various solar PV component manufacturers, suppliers and distributors, both local and international.
This Manufacturing Working Group, under the leadership of its own Chairperson, Patrick Govender and Vice Chairperson, Conrad Harmse, will focus on specific issues that relate to the development of local PV supply-chains, supporting the South African Renewable Energy Masterplan’s focus of identifying and maximising industrialisation and employment opportunities from the implementation of IRP 2019, under the leadership of the Department of Mineral Resources and Energy (DMRE) and dtic.
With the aim to contribute to a meaningful definition and position of local content as it relates to government-led procurement programmes, this Working Group elected officials (Frans-Willem Vermaak and Lourens Vermaak) to represent their collective interests at the South African Renewable Energy Master Plan (SAREM) level.
I would actively encourage as many players as possible from across the industry to come together through this Working Group to allow us to formulate an industry position that will help us tackle the challenges facing our industry.
Together we will map out the component manufacturing, supply, and distribution landscape in South Africa. Through a thorough review of policy, technical and lender requirements for local manufacturing, we will be better able to align with industry capability. We will further engage key policy makers to ensure an enabling environment for local manufacturers and support further investment into industrialisation.
A key ambition for any local content requirements must be to increase skills transfer and development and we will engage with the relevant SETAs to include and encourage youth participation and employment within the industry.
By interacting with other industry groups, our hope is to create a more collaborative sector that will lead to the increased rollout of solar PV in South Africa.
There is always a balance to be struck and compromises that sometimes must be made. However, by working together, we can make sure that future local content requirements really address the needs of the market and support long term policy objectives of both government and industry in the short, medium, and long-term.
Govender is the COO of the solar PV industry representative body, SAPVIA.
Wind power producers may provide immediate surplus power
The South African Wind Energy Association has engaged with its members to ascertain if the sector is able to provide additional power, in line with the recent call for additional energy from existing Independent Power Producers by the Department of Mineral Resources and Energy (DMRE).
The Department of Mineral Resources and Energy (DMRE)’s proposed ‘Additional Megawatt Programme’ will see the Department entering into agreements with existing renewables Independent Power Producers (IPPs) to procure additional energy that wind and solar farms could supply, over and above, what is currently allowed under their existing Power Purchase Agreements.
“We welcome this call from government and can confirm that several of our IPP members have indicated that they will be responding. They are of the view that it is possible to run their wind turbine generators (WTG) at higher power output or include a power boost to increase generation output of already installed wind turbines,” explained Ntombifuthi Ntuli, CEO of SAWEA.
She added that the industry will be seeking clarification on practical details of the ‘Additional Megawatt Programme’, but that the response has been positive overall. When the country reached unprecedented Stage 6 load-shedding in 2019, SAWEA called for the immediate release of available additional capacity from operational wind farms into the national grid, by lifting the Maximum Export Capacity (MEC) on all operating wind farms.
“Earlier this month, the IPP Office issued a call to all operational IPPs with projects in Bid Window 1 to 4, to make available additional capacity from their operational plants, in order to contribute towards closing the power supply capacity gap. It is encouraging to see that industry proposals are being taken seriously by government and are now being implemented,” said Ntuli.
Due to demand exceeding available supply capacity, South Africa has been plagued with power shortages for a long time. This is despite government’s efforts to implement a number of programmes to close the capacity gap, which include the announcement of preferred bidders for the RMIPPPP and issuing of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Round 5 Request for Proposals (RFP) as well as announcing future procurement plans.
“Eskom’s Electricity Availability Factor has been below recommended levels for a very long time, as demonstrated by the protracted load-shedding that our country has been experiencing for well over a decade now. This indicates an urgent need to procure new generation capacity, both in the long-term and short-term, to bring the available capacity to healthy levels again,” added Ntuli.
Wind energy industry celebrates new bid window for renewable procurement
The South African Wind Energy Association (SAWEA), together with the broader renewable power sector, are celebrating the Department of Mineral Resources and Energy’s (DMRE) announcement to open a new procurement round.
DMRE Minister, Gwede Mantashe, announced the opening of Bid Window 5 of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), which will procure a further 2 600MW of renewable energy from Independent Power Producers (IPPs).
“The announcement by the Minister to open Bid Window 5, calling for proposals from IPPs, marks the rebirth of the wind energy industry, as the last bidding round took place almost seven years ago, in 2014.”
Ntombifuthi Ntuli, CEO of SAWEA
The Energy Minister has set a firm closing date for the Bid Submission as August 4, 2021.
Addressing energy stakeholders in Johannesburg earlier this month, Minister Mantashe said the auction, which aims to procure 1.6GW of wind energy, is in line with the gazetted IRP2019.
The wind energy industry is dependent on policy tones set by government. The Association has noted and is grateful to the various government departments, for implementing policies over the last two years. The wind sector sees these changes, which are closing policy gaps, as a clear direction in terms of plans to procure new generation capacity on an ongoing basis, in line with the energy roadmap, which sees 14.4GW of new wind power over the next decade.
This procurement window, will add vitally needed power capacity to the country, which continues to struggle with strangled energy supply, an ongoing crisis that is economically crippling and has seen South Africa buckling under the strain of load shedding for the last few years.
“With supporting policy and smooth procurement rounds, expected to include the announcement of Bid Window 6 during the course of 2021 as reiterated by the Minister today, the renewable power sector certainly has a key role to play in re-building the country as a significant catalyst of economic growth, and investors have a big role to play in making that a reality,” adds Ntuli.
Minister Mantashe simultaneously announced the preferred bidders for the procurement of the 2000 MW Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), which SAWEA recognises as a significant move, as wind and solar will now be able to play a role in dispatchable power.
Two of the eight preferred bidders in RMIPPPP include wind power IPP’s in the form of hybrid projects. These projects incorporate wind, solar and storage technology on a utility scale, which is a first for South Africa.
SAWEA has noted that this is a massive advantage for the country, as hybrid projects enhance the reliability and stabilisation of the power generation system. Plus, they do not always require grid expansion, as hybrid grids produce power at different intervals and during complementary seasons.
The advantage of hybrid systems, when incorporated with storage, is that the power is ‘dispatchable’. So, when the wind or solar systems are not generating power, hybrid systems provide power through batteries. Whilst the battery capacity needs to be large enough to supply electricity during non-charging hours, when they run low, the generating plant can provide power to recharge the batteries.
“An advantage of renewable energy hybrid systems lies in their ability to combine two of the fastest growing renewable energy technologies. Hybrid systems can also take advantage of the complementary nature of solar PV, which produces power during the day, and wind, which produces most of its power at night,” concluded Ntuli.
Municipal Energy Resilience Project launched for a more energy secure future
24 November 2020
We are pleased to announce the official launch of the three-year Municipal Energy Resilience (MER) Project to assist municipalities to take advantage of the new energy regulations, which may include purchasing of energy directly from Independent Power Producers (IPPs), so that we can create a more energy secure future in the Western Cape.
The MER Project will help municipalities across the Western Cape to understand the requirements of the new national energy regulations, and mitigate related risks as well as provide for network and operational capacity requirements for energy project development and procurement in municipalities.
The MER Project is spearheaded by our Green Economy unit at the Department of Economic Development and Tourism, who are working in collaboration with the Department of Local Government and Provincial Treasury to enable the development of energy projects and engage with municipalities on multiple fronts.
The procurement of energy at utility and municipal distribution scale, such as bulk energy purchases from IPPs, under conditions of developing and evolving policies and regulations is a complex and challenging task. Municipalities may not have the policies, plans, resources, funding, or procurement expertise to procure wholesale electricity from sources other than Eskom, specifically IPPs. Neither have all municipalities’ electricity distribution systems been technically evaluated to clarify their readiness to support new electricity generation and energy trading.
And so, the MER Project is structured in the following three phases:
Phase 1 involves the identification of potential candidate municipalities and pioneering projects and the development of a roadmap for rolling these out. The work will explore multiple pioneering renewable energy technologies and scales, cost options, scale of investment required, location issues, risks, municipal readiness needs, infrastructure needs, timelines to get capacity onto the grid, transaction and procurement mechanisms and regulatory issues.
Phase 2 will focus on starting the implementation of the pioneering energy projects in the identified candidate municipalities along with working with municipalities to help fill gaps to enable future energy project implementation.
Phase 3 will see the development of a master plan for energy projects to be rolled out in municipalities along with the commencement of energy projects in further municipalities as budget allows.
While we recognise that only a few municipalities are likely to be able to procure utility scale energy from IPPs in the near term, there are other energy generation and storage opportunities that may serve to improve municipal energy resilience and future economic growth in the Western Cape.
To support the MER Project, two bids have been advertised in the Government Tender Bulletin on 20 November 2020 and all applicable parties are invited to apply:
Energy resilience-related work that is already being undertaken by our Green Economy unit and that will continue, includes support to municipalities to develop and revise SSEG feed-in tariff frameworks and feed-in tariffs, engagement with businesses to drive take-up of rooftop solar PV, support to municipalities to enable wheeling on their grid, support to energy sector businesses and the provision of energy technology and cost options to businesses and municipalities, and support to green economy investors in the Western Cape.
Cumulative load shedding in 2020 was 23% worse than in 2019 despite a 9% decrease in real GDP. This is estimated to have cost the country’s economy R500 million per stage per day and the Western Cape’s economy R75 million per stage per day. Recent regulatory changes in the energy sector which we called for, have started to open the door for new renewable energy generation which will allow for an increasingly decentralised system of energy generation and distribution to mitigate the risk of load shedding in South Africa.
And so, we will continue to do everything we can to support municipalities and businesses to participate in the growing green energy sector and to become more energy resilient so that together we can create a more energy resilient future in the Western Cape.
REDZ role in South Africa’s Just Energy Transition
Renewable Energy Development Zones (REDZ) have a key role to play in South Africa’s Just Energy Transition, creating priority areas for investment in the electricity grid and increasing South Africa’s green energy map, by enabling higher levels of renewable power penetration.
In particular, wind developers are investigating the potential for development in the eMalahleni REDZ, despite Mpumalanga not being known for high levels of wind, a challenge that can certainly be overcome with increased turbine hub height.
As the wind industry embarks on a journey of localisation and local economic development, industry players believe that the region can be positioned as a component manufacturing hub, which will further entrench the positive impact on job creation by the wind industry. It is recognised that engagement with the relevant government stakeholders is critical.
“The new eMalahleni REDZ is a huge step toward accelerated economic development in Mpumalanga. As we move to implement the requirements of the Integrated Resource Plan (IRP) 2019, it would appear natural that a portion of the 1600MW per annum should be allocated to the northern region of the country and research has dispelled the myth that wind is not an economically viable option in this region,” said Mercia Grimbeek, Head of Project Development for Enertrag, in South Africa and Chair of the South African Wind Energy Association.
“Through the implementation of national and even regional auctions the area could receive the economic stimulus that it needs and reduce the almost complete reliance on mining generated income to drive and support the economy. Renewable energy such as wind power plants is deployed fairly quickly when compared to other large infrastructure projects. This allows for the economic benefits to flow through to communities in a relatively short period of time not only directly through job creation but also indirectly through manufacturing and supply chain management,” added Grimbeek.
Due to the large number of energy-intensive users, in and around eMalahleni, it is seen as an ideal location to promote private off-taker agreements for the purchase of energy from Independent Power Producers (IPPs).
Hence, the development of the eMalahleni REDZ could be viewed as a perfect partnership between Government and IPPs, further enabling a Just Energy Transition for the benefit of the communities of Mpumalanga.
It is believed that with the provision of a consistent regulatory framework that supports a focused project delivery pipeline, the renewable energy industry would have the opportunity to expand the manufacturing value chain in this REDZ.
“A stable and consistent project pipeline will support manufacturing of components locally, with the added benefit of skills development and training for the local communities. One cannot ignore that the introduction of renewable energy would require a significant amount of skills transfer and human capital investment, so we believe that by expanding into eMalahleni, local communities will be empowered and less reliant on a single industry to provide economic certainty,” concluded Grimbeek.