SA’s first green projects net R800m
RENEWABLE energy from South Africa’s first wind and solar (photovoltaic) projects created R800 million in net financial benefits in 2014, according to an independent study by the CSIR.
The report says the independent power producers (IPPs) generated financial benefits in the form of fuel savings and macroeconomic value of R5.3 billion, while they cost only R4.5bn in tariff payments.
The CSIR said, in addition, that the wind and solar projects avoided 120 hours of so-called “unserved energy”, saving an additional R1.6bn. “Unserved energy” occurred when the supply situation was so tight that some customers’ energy supply would have been curtailed or “unserved” if it had not been for renewables.
The IPPs had saved Eskom’s power system R3.7bn in diesel and coal fuel costs, it said.
South Africa’s power system is under severe constraint, with diesel-fired gas turbines meant to be used for a maximum of three hours at peak times running for up to 15 hours to avoid load shedding.
The Department of Energy is running a procurement programme to expand generation capacity and power purchase agreements between IPPs and Eskom. By the end of 2014, almost 1 600 megawatts (MW) of wind and solar projects had been commissioned and were feeding energy into the grid.
Tobias Bischof-Niemz, the head of the CSIR Energy Centre, said: “The study was based on an actual hourly production data for the different supply categories of the South African power system: that is coal, diesel, wind and power.
“We’ve developed a methodology at the CSIR Energy Centre to determine whether at any given hour of the year renewables have replaced coal or diesel generation, or whether they have even prevented so-called ‘unserved energy’.”
On the power purchase agreements, Eskom said on Friday that from bid rounds one and two, respectively 26 and seven projects had been connected to the grid, with a capacity of 1 337MW and 333MW (1 670MW), respectively.
It said in the procurement programme, four bidding rounds had been concluded.
In the initial rounds, over 60 bids were awarded preferred bidder status for a total of about 4 000MW. This is about 10 percent of the total current existing generation capacity in the country.
The power utility said its grid was strong enough to connect the IPPs. It said its commitment to facilitating IPP connection to the grid was beyond question. However, on execution level there were technical, financial and other difficulties.
“Eskom is in talks with the government and the energy regulator in finding workable solutions to deal with grid access applications, grid expansion and policy governing new projects from other generators and funding.”