Large scale industrial RE projects is one solution for SA’s constrained electricity supply
South Africa is facing a constrained electricity supply and one obvious solution would be embedded renewable energy (RE) generators at industrial sites.
According to juwi Renewable Energies MD, Greg Austin: ”Renewable energy (RE) is mostly cheaper than other forms of energy, is deployed quickly and we’re really at an inflection point with respect to the market mechanisms that are available for industry to deploy RE opportunities, including PPAs (as per REIPP), self-consumption or embedded generation.”
Austin adds that companies need to pay more than lip service to sustainability, “Big business can contribute to sustainability in South Africa by, for example, procurement – don’t talk green, buy green”. Leaders can be asking themselves how green their buildings, their suppliers, their business and manufacturing processes are.
“Sustainability is a far wider concept than just energy conservation and alternative energy sources. Business and business leadership needs to act in a way that minimises human impact on the environment; perform full-cost accounting; and develop the culture of environmental ethical decision-making.
“One example of leadership in this area is a major motor manufacturing company being committed to energy sustainability, with their vision being to achieve a completely carbon-neutral energy supply. One of the main levers to do this is energy efficiency. By 2020, they plan to reduce energy consumption per vehicle produced by 45% compared with 2006 and they have specific projects, and actions to achieve this.
“They have moved a number of computing applications to a colder climate to exploit the reduced cooling then required for that same server throughput. The relocated computer centre is also powered entirely by two autonomous renewable energy sources: geothermal and hydro. As a result, operation of the computer centre is completely environmentally neutral.”
“In South Africa, PV now has reached grid parity in many economic hubs and makes for an attractive business case, given the current tariffs and irradiation levels in these hubs,” adds Austin.
In addition, “technology creates additional options towards sustainable industrial outcomes too, such as hybridising diesel generator systems on mines with on-site solar PV; combining PV plants with energy storage capability; and moving towards micro-grids.”
Despite announcements last week about the reduction in load shedding this winter by Brian Molefe, Eskom CEO, the country’s economy is constrained by the shortage of electricity and South Africa is facing pressure from two sides: rising electricity costs (cost per kWh) and lack of energy security (cost per lost kWh) from traditional electricity sources.
“Our economy is in a downturn and demand for energy has reduced as a result; if this were not the case then our economy would be directly constrained by the shortage of electricity as has been the case over the recent past few years. To their credit, Eskom have taken advantage of this dip in the economy and increased their plant availability through accelerated maintenance to ensure that the generators have more up time,” said Austin.
Insufficient Eskom reserves means our electricity supply is no longer dependable. In addition, electricity has become relatively expensive and electricity price increases have significant strategic & operational implications. This winter will no doubt again see the use of the expensive peaking power plants.
When comparing the levelised cost of electricity (LCOE) of various energy sources in SA, RE sources are the most cost effective option with utility-scale solar energy coming in at around R0.75 per kWh, and wind at around R0.65 per kWh.
To consider whether RE is a solution for industrial energy requirements, a few questions can help to assess the viability of industrial RE opportunities:
• Is there a sufficiently good alignment between the site’s load profile and the proposed RE solution?
• Is there sufficient yield to drive down the LCOE of the RE Plant?
• Is the current and forecast blended grid or municipal tariff for the site greater than the LCOE of the RE Plant?
• Is there sufficient space, and is that space suitable for constructing the RE generator?
South Africa is facing a constrained electricity supply and one obvious solution would be embedded renewable energy (RE) generators at industrial sites.
According to juwi Renewable Energies MD, Greg Austin: ”Renewable energy (RE) is mostly cheaper than other forms of energy, is deployed quickly and we’re really at an inflection point with respect to the market mechanisms that are available for industry to deploy RE opportunities, including PPAs (as per REIPP), self-consumption or embedded generation.”
Austin adds that companies need to pay more than lip service to sustainability, “Big business can contribute to sustainability in South Africa by, for example, procurement – don’t talk green, buy green”. Leaders can be asking themselves how green their buildings, their suppliers, their business and manufacturing processes are.
“Sustainability is a far wider concept than just energy conservation and alternative energy sources. Business and business leadership needs to act in a way that minimises human impact on the environment; perform full-cost accounting; and develop the culture of environmental ethical decision-making.
“One example of leadership in this area is a major motor manufacturing company being committed to energy sustainability, with their vision being to achieve a completely carbon-neutral energy supply. One of the main levers to do this is energy efficiency. By 2020, they plan to reduce energy consumption per vehicle produced by 45% compared with 2006 and they have specific projects, and actions to achieve this.
“They have moved a number of computing applications to a colder climate to exploit the reduced cooling then required for that same server throughput. The relocated computer centre is also powered entirely by two autonomous renewable energy sources: geothermal and hydro. As a result, operation of the computer centre is completely environmentally neutral.”
“In South Africa, PV now has reached grid parity in many economic hubs and makes for an attractive business case, given the current tariffs and irradiation levels in these hubs,” adds Austin.
In addition, “technology creates additional options towards sustainable industrial outcomes too, such as hybridising diesel generator systems on mines with on-site solar PV; combining PV plants with energy storage capability; and moving towards micro-grids.”
Despite announcements last week about the reduction in load shedding this winter by Brian Molefe, Eskom CEO, the country’s economy is constrained by the shortage of electricity and South Africa is facing pressure from two sides: rising electricity costs (cost per kWh) and lack of energy security (cost per lost kWh) from traditional electricity sources.
“Our economy is in a downturn and demand for energy has reduced as a result; if this were not the case then our economy would be directly constrained by the shortage of electricity as has been the case over the recent past few years. To their credit, Eskom have taken advantage of this dip in the economy and increased their plant availability through accelerated maintenance to ensure that the generators have more up time,” said Austin.
Insufficient Eskom reserves means our electricity supply is no longer dependable. In addition, electricity has become relatively expensive and electricity price increases have significant strategic & operational implications. This winter will no doubt again see the use of the expensive peaking power plants.
When comparing the levelised cost of electricity (LCOE) of various energy sources in SA, RE sources are the most cost effective option with utility-scale solar energy coming in at around R0.75 per kWh, and wind at around R0.65 per kWh.
To consider whether RE is a solution for industrial energy requirements, a few questions can help to assess the viability of industrial RE opportunities:
• Is there a sufficiently good alignment between the site’s load profile and the proposed RE solution?
• Is there sufficient yield to drive down the LCOE of the RE Plant?
• Is the current and forecast blended grid or municipal tariff for the site greater than the LCOE of the RE Plant?
• Is there sufficient space, and is that space suitable for constructing the RE generator?
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