Sisa Njikelana has also recommended that the next set of hearings include the Department of Energy (DoE), Eskom, the National Energy Regulator of South Africa and the South African Local Government Association, and that it should explore the possibility of ensuring greater support for cogeneration across all spheres of government.
The chairperson made the call after hearing concerns about the barriers being placed in the way of cogeneration’s progress.
Lawmakers were told that there was potential for South Africa to produce as much as 3500 MW of electricity through the cogeneration of electricity from waste heat fuels.
The Industrial Development Corporation, which recently supported the an 8 MW cogeneration investment by SA Calcium Carbide (SACC), in Newcastle, argued that higher power prices were creating an opportunity for industrial facilities to tap into cogeneration prospects that were hitherto not economically viable.
The State-owned bank estimated that South African mineral smelters and chemical plants had the potential to generate more than 2 000 MW of electricity from hot gases.
However, various presenters to the July Parliamentary hearings expressed frustration with the slow pace of uptake, according to Creamer media.
Particular concern was raised over the absence of incentives, as well as the fact that various obstacles preventing the development of such facilities had not yet been removed.
It was noted that the current version of the Integrated Resource Plan (IRP2010) did not explicitly recognise cogeneration and was vague on the treatment of new projects.
The DoE is currently redrafting the IRP2010 and consultations on the new generation roadmap should be held in the coming months.|
Questions were also raised about where South Africa’s regulatory framework was sufficiently supportive of cogeneration investment, particularly given that little progress had been made on the so-called cogeneration feed-in tariff (Cofit). As with the renewable feed-in tariff, however, the Cofit was likely to run foul of the Public Finance Management Act, which stipulates competitive bidding as part of any public procurement process.