THE sod had been turned on eight wind power and 18 solar power plants across South Africa in recent weeks, delegates at Johannesburg’s Energy Indaba said on Tuesday.
Policy certainty, for which the government had to be praised, had led to investment, along with the kind of competition that led to plummeting prices, said Werksmans director Happy Masondo.
The sod-turnings emanate from the first "window" of the Department of Energy’s Independent Power Producer programme that aims to produce 3,725MW from wind, solar, small hydro-gas, biogas, biomass and landfill gas by 2016.
While South Africa had the policy certainty required for investment, it and the rest of the continent were not being properly marketed as investment destinations that could deliver dollar returns in the power sector of between 12% and 13%, said the CEO of independent power producer Cennergi, Thomas Garner.
"The US and Europe are actually sitting on stashes of cash that they want to invest, but they see Africa as a big ... risk. Africans have to market Africa better as an investment destination," Mr Garner said.
South Africa was energy poor and represented a huge potential market, said the Zimbabwe Energy Regulatory Authority’s Gloria Magombo, who moderated the Energy Indaba’s panel discussion on renewable energy in Africa.
Mr Garner said the key was policy certainty, which was where South Africa had won — the policy framework around the introduction of power from renewable sources was "great" and gave "a lot of certainty". However, Mr Garner said improvements could be made. It took six to 12 months to construct most renewable power plants, and up to 36 months to gain connection to the grid.
Ms Masondo said clients were "clamouring" to take part in the next bid round — in August — despite the long wait to grid connection.
It had taken South Africa a long time to get to policy certainty, and some small companies had paid the price of the wait, "but we are there now and there is hope", she said.
RedCap Investments MD Mark Tanton said wind power tariffs had dropped from R1.14/kW in the first "window" to 89c/kW in the second, and would probably drop further when bids for the third "window" were submitted in August. However, he expected there would eventually be some levelling off, and even correction, in the general price of energy from renewable sources.
South Africa was benefiting from the import of "very mature" technology from abroad, Mr Tanton said. He acknowledged that the flipside of this was that South African technology was losing out in the competition game because of price.
Mr Tanton said it would not be practical to demand that South African technology was used in power plants because if electricity was too expensive, consumers would simply not use it.
Mr Garner said South Africa also had to look to innovative funding mechanisms for "mini-grids" — grids that would bring power to small rural communities from local sources, such as wind — because established project financiers looked for a particular return on investment.
Source....
Policy certainty, for which the government had to be praised, had led to investment, along with the kind of competition that led to plummeting prices, said Werksmans director Happy Masondo.
The sod-turnings emanate from the first "window" of the Department of Energy’s Independent Power Producer programme that aims to produce 3,725MW from wind, solar, small hydro-gas, biogas, biomass and landfill gas by 2016.
While South Africa had the policy certainty required for investment, it and the rest of the continent were not being properly marketed as investment destinations that could deliver dollar returns in the power sector of between 12% and 13%, said the CEO of independent power producer Cennergi, Thomas Garner.
"The US and Europe are actually sitting on stashes of cash that they want to invest, but they see Africa as a big ... risk. Africans have to market Africa better as an investment destination," Mr Garner said.
South Africa was energy poor and represented a huge potential market, said the Zimbabwe Energy Regulatory Authority’s Gloria Magombo, who moderated the Energy Indaba’s panel discussion on renewable energy in Africa.
Mr Garner said the key was policy certainty, which was where South Africa had won — the policy framework around the introduction of power from renewable sources was "great" and gave "a lot of certainty". However, Mr Garner said improvements could be made. It took six to 12 months to construct most renewable power plants, and up to 36 months to gain connection to the grid.
Ms Masondo said clients were "clamouring" to take part in the next bid round — in August — despite the long wait to grid connection.
It had taken South Africa a long time to get to policy certainty, and some small companies had paid the price of the wait, "but we are there now and there is hope", she said.
RedCap Investments MD Mark Tanton said wind power tariffs had dropped from R1.14/kW in the first "window" to 89c/kW in the second, and would probably drop further when bids for the third "window" were submitted in August. However, he expected there would eventually be some levelling off, and even correction, in the general price of energy from renewable sources.
South Africa was benefiting from the import of "very mature" technology from abroad, Mr Tanton said. He acknowledged that the flipside of this was that South African technology was losing out in the competition game because of price.
Mr Tanton said it would not be practical to demand that South African technology was used in power plants because if electricity was too expensive, consumers would simply not use it.
Mr Garner said South Africa also had to look to innovative funding mechanisms for "mini-grids" — grids that would bring power to small rural communities from local sources, such as wind — because established project financiers looked for a particular return on investment.
Source....
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