SA wind gives green funding a thumbs up

The South African Wind Energy Association (SAWEA) has put its voice of support behind the first of its kind green financing deal, announced at Cop26 climate talks last week. 

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SAWEA announce chair to lead wind energy transition

The South African Wind Energy Association (SAWEA) has announced the re-appointment of Mercia Grimbeek as Chair for a second two-year term.

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SA wind industry joins global push for net zero ahead of COP26 and climate change bill

Ahead of this year’s United Nations Climate Change Conference, COP26, taking place 31 October to 12 November 2021, and the imminent parliamentary tabling of South Africa’s Climate Change Bill, the South African Wind Energy Association (SAWEA) has reiterated its commitment to ensure the country’s wind industry aligns with global plans.

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Conference opens to address wind powers role in SA economy and climate change

Chair of the South African Wind Energy Association (SAWEA), Mercia Grimbeek welcomed local and international wind energy industry members and sector stakeholders to the 10th annual international Wind Industry conference – Windaba 2021, marking a decade of wind power in South Africa. 

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SANEDI joins SAWEA on its journey across SA’s EnergyDRIVE #WINDROUTE

The South African National Energy Development Institute (SANEDI), has announced that it will board the much loved renewable energy educational road trip, the EnergyDRIVE, as a partner in this year’s campaign, next month.

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Letlhogonolo Tsoai, Technical Programme Officer of Sawea – South African Wind Energy Association, in conversation with Gordon Brown, publisher of Green Economy Journal.

Letlhogonolo Tsoai, Technical Programme Officer of Sawea – South African Wind Energy Association. , in conversation with Gordon Brown, publisher of Green Economy Journal.

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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.

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SA’s renewable energy sector responds to negative commentary made at Dublin Climate Week

Responding to negative comments made at the Dublin Climate Dialogues, by the Mainstream Renewable Power’s former-Chairman, Dr Eddie O’Connor, on Africa’s capability to handle renewable energy investment, the South African renewable energy sector has explicitly stated their objection.

Representing the wind and solar industries, the South Africa Wind Energy Association (SAWEA) and the South African PV Industry Association (SAPVIA), stand by the conviction that the country’s and indeed the continent’s Renewable Energy sector continues to grow in South Africa with the Independent Power Procurement Programme (REIPPPP), being a prime example of a world-class programme originating in Africa.

“As an African, I am deeply offended and concerned by the unfounded statements made knowing that our industry is largely owned, operated and constructed locally, driven by our Government and benefiting the people of South Africa, while providing attractive investment opportunities for global market players, which demonstrates that we can be proud of this sector’s ascribed skills and expertise, despite being comparatively young,” said Niveshen Govender, Chief Operations Officer at SAPVIA.

The global energy industry by and large regards the African Renewable Energy market as a fast-growing market. For wind energy, the Global Wind Energy Council has reported that Africa reached 6GW installed capacity in 2020, a figure that’s expected to surge to 10.7 GW over the next five years, driven largely by South Africa, Egypt and Morocco.  Similarly, the Global Solar Council estimates 6.6GW of solar PV is to be installed per year across the African continent.

The South African government designed and implemented REIPPP programme, has been hailed as being well designed, transparent and fair. In less than a decade, the sector has proven its ability to deliver over 112 independent wind and solar power projects on time and on budget adding much-needed 6000 MW+ of clean generating capacity onto the grid, as well as over R 209-billion in investment flows into the South African economy.

“We have much to be proud of – this is a sector built on the basis of government policy and our government has demonstrated the will to resolve regulatory barriers to enable the sector to grow. Renewable energy in South Africa owned and built by and for South Africans, with 84% of the total equity in the sector held by local investors, demonstrating the country’s ability to hold its own in terms of RE deployment,” added Ntombifuthi Ntuli, CEO of SAWEA.

The capability that has been built and localised in the country on the back of the REIPPPP programme is immense and extends to technical skills, manufacturing of components and auxiliary services in support of the sector’s growth.

Mainstream Renewable Power, issued a statemen, 27 May 2021, announcing the resignation of Dr Eddie O’Connor as Chairman of the Board of Directors.

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A closer look at REIPPPP bid window 5

The Department of Mineral Resources and Energy (DMRE) recently launched the Request for Proposals (RFP) for the Fifth Bid Window (BW5) under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which calls for proposals from Independent Power Producers (IPPs) to develop new generation capacity of 2 600MW, including 1 600MW from onshore wind energy and 1 000MW from solar photovoltaic (solar PV) power plants, in line with the government’s intention to increase generation capacity and ensure the security of energy supply to society. Ahead of the expected DMRE Bidders’ Conference, to be hosted on an e-platform, during May 2021, which will provide more information on the qualifying criteria and bid submission expectations, the South African Wind Energy Association has shared its impression of BW5.

“There are two key aspects of BW5 that are worth unpacking, namely the local content requirements and the bid evaluation weighting, which has now shifted in line with governments standard procurement norms,” said Ntombifuthi Ntuli, CEO of SAWEA.

LOCAL CONTENT

The BW5 local content threshold has been retained at 40%, in line with previous rounds.  The difference in this round is that there is no local content target, only the threshold is prescribed. Furthermore, for the first time, the REIPPPP introduced designated local content, which, over and above the threshold, requires bidders to procure certain specified components locally. Should these components be unavailable, bidders can apply for exemption, which needs to be lodged with the Department of Trade, Industry and Competition (DTIC).

The wind industry had extensive consultation with the IPP Office and dtic prior to the issuing of the BW5 RFP, specifically on local content requirements and what the industry can achieve in the short and medium terms. To achieve a successful localisation programme with incremental local content thresholds, a consistent procurement pipeline should be established. This would be a positive development as it facilitates augmented job creation and skills development as the economy recovers from the Covid-19 pandemic and looks to accelerated economic growth.

“Consecutive bidding rounds will enable local manufacturing facilities to be re-established and the potential expansion of already operating manufacturers, which is very crucial in creating long-term sustainable jobs,” added Ntuli.

SAWEA has, however, cautioned that the stop-start nature of procurement, and the latent bid windows, severely damaged the meaningful momentum, pre-2015, which established new manufacturing capacity within the wind and solar value chains in South Africa. Significant manufacturing capacity was lost in the delay between BW4 and BW5, with many companies being forced to shut down as a result of the delays, unable to carry the cost of overheads indefinitely.                

                                 

WTG Technician in position to guide rotor into position on the nacelle.

Looking at the recovery of the manufacturing sector and the possibility of re-investment, Ntuli commented, “Whilst we wholeheartedly celebrate the new impetus, one must be mindful that regaining the investor confidence will not be an overnight process. To enable the required quantity and very importantly, quality, of components will require at least two to three years of investment and development. It is therefore crucial that further interruptions or delays are not encountered. A controlled roll-out of procurement will allow all aspects of the value chain, and not only the manufacturing sector, to expand.”

SAWEA confirms that the industry remains confident in its ability to meet local content requirements and reiterates that it has no reservations or concerns that the sector will respond positively. The Association has facilitated conversations between the DMRE, DTIC and the other key sector stakeholders, to align strategically and map the way forward to deliver on increased local content requirements.

“The wind industry has further submitted its vision to practically increase local content in the next few years and remains fully supportive of growing the local manufacturing sector,” explained Ntuli.

The Association is further heartened by the establishment of the South African Renewable Energy Masterplan (SAREM), which is set to contribute immensely to fast-tracking the establishment of local manufacturing capacity. It is intended that this framework will provide a blue-print from which government departments such as the dtic and the DMRE can provide incentives for investment into local manufacturing.

This is once again important for future bid windows and the renewable energy sector’s ability to deliver jobs and investment, in the post-Covid-19 recovery period.

“SAREM represents an opportunity to identify jobs and investment in our sector linked to the country’s resource plan, as well as to clearly outline how job creation and investment might be enhanced if impediments are removed and replaced rather with supportive policy,” added Ntuli.

BID EVALUATION WEIGHTING

A noted change in BW5 is the evaluation weighting, which has changed from a 70:30 weighting to a 90:10 weighting, indicating a distinct emphasis on tariff. Black women ownership in the project company is a new requirement and has a 5% threshold, otherwise, all other economic development requirements as per BW4 have been retained.

In previous rounds, the REIPPPP used a 70:30 (price: economic development), weighting, attaching higher priority to economic development objectives than the typical government structure of 90:10 at the time.

In closing, SAWEA has noted that the DMRE’s statement reveals that given the energy challenges the country is facing, the qualification criteria have been developed to promote the participation of projects that are fully developed and will be able to be constructed and connected to the national grid as soon as twelve months from financial close, but not later than twenty-four months post financial close.

        

                               

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Environment, Forestry and Fisheries publishes Geographical areas for development

31 Mar 2021

Geographical areas for the development of renewable energy development zones gazettes

The geographical zones identified as important for the expansion of South Africa’s energy mix have been published for implementation.

The Notices are part of the alignment of regulations required for the effective implementation of national environmental management legislation in terms of the One Environmental System.  They will also contribute to the expansion of the country’s alternative energy mix as the country works towards a reduction in the reliance on coal for energy.

The publication in the government gazette of the development corridors for strategic gas transmission pipeline infrastructure, and large scale wind and solar photovoltaic energy facilities follows an extended public consultation period on the proposed Renewable Energy Development Zones and improved Environmental Impact Assessment processes in 2020.

Amendments to the procedures to apply for, and for decisions on, Environmental Authorisations (EA) for the development of alternative energy initiatives in what is known as the Renewable Energy Development Zones (REDZ) have also been published for implementation. The EA process has been shortened to allow for a smoother implementation of alternative energy growth in South Africa. Proactive site sensitivity work on the REDZ has been completed through two two-and-a-half year Strategic Environmental Assessment (SEA) processes. These determined the environmental sensitivity of each of the zones and corridors, and future renewable energy developments within identified zones in South Africa will require an environmental authorisation.

It is important to nnote that the Government Notice identifies and adds to, development corridors previously determined through three Strategic Environmental Assessments undertaken between 2016 and 2019.

All comments received during the extended period for public inputs in 2020 were taken into consideration when making the final decision on the corridors. With regard to the nature of the comments, several raised concerns about the contribution of greenhouse gas emissions to climate change and the risks of gas pipelines from a leakage and fire perspective.

South Africa has committed to a reduction in greenhouse gas emissions and is working towards a low emission, climate-resilient economy and society. The Presidential Climate Commission is advising government on a just transition that will leave no-one behind.  In terms of the Integrated Resource Plan, a portion of the country’s energy mix is to be generated from gas. Gas is recognised worldwide as an enabling fuel for a just transition. The issue of risks was considered and evaluated through the strategic environmental assessment that was undertaken to identify the transmission corridors.

To access the comments made, and the Department’s response to these, click on: http://egis.environment.gov.za – Geographical Areas; and https://www.environment.gov.za/legislation/gazetted notices

With regard to the effect of the identification of corridors for REDZ development on landowners, none will be affected at this time.  

Should a decision be made to develop a gas pipeline, for example, in one of the corridors in the future, the property owner will be approached regarding servitude access.  The landowner will have to have granted approval in principle, for the servitude across his/her property, prior to the submission of the application for environmental authorisation to the competent authority.

The landowner would, therefore, be fully aware of any such proposed development.

The expansion of energy supply within the pre-assessed strategic corridors will assist the country as it moves towards a low carbon and climate-resilient economy.

To access the government gazettes, click on:

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