Page 43 - Energize November 2021

VIEWS AND OPINION

Scope grows for renewable energy in South Africa

by Nicola Rump and Rob Gardiner, SRK
Consulting

s the deadline approaches for
the ‘financial close’ phase of
Athe Risk Mitigation Independent
Power Producer Procurement Programme
(RMIPPPP), it is clear that renewable
energy technologies have caught up with
their fossil fuel competitors – which is
good news for South Africa’s sustainability
aspirations.
The awarding of preferential bidder
status to eight companies earlier this
year demonstrated what could be
regarded as something of a turning
point in perceptions about renewables.
The RMIPPPP had called for bids to Nicola Rump Rob Gardiner
supply 2000 MW to meet the immediate
electricity supply gap, and another 11
813 MW from various energy sources. comparison, especially when factoring in Innovating with renewables
The bids came from private producers the externalised costs of burning fossil The point that is emerging quite strongly
who planned to use energy sources fuels. While the US Energy Information is this: the cost competitiveness of
ranging from liquified natural gas (LNG) Administration puts the carbon dioxide leveraging renewable energy through
and diesel (mainly as back-up) to solar emissions of LNG at almost half that technologies such as solar PV is really no
photovoltaic (PV) technology and battery of bituminous coal, there are growing longer in question. The focus has shifted
energy storage systems (BESS). This arguments against South Africa becoming to questions of scalability and base load.
provided a useful opportunity to gauge over-reliant on LNG. The exciting trend here is the rapid growth
how the cost differential had closed Such arguments and others against of battery storage, with its potential to
between renewable energy generation the use of fossil fuels have as much overcome to some extent the natural
and storage on the one hand, and fossil to do with the country’s general air cycles inherent in renewables.
fuel options on the other. quality as with our climate change Like all innovations, this field is
Of course, it needs to be remembered commitments in terms of the Paris replete with opportunities and challenges.
that the final awarding of the bids Agreement. According to the World Ideas need to be practically applied
will be based on value-for-money Health Organisation, we are rated 30th before they can be proven, and ongoing
propositions, which can only be finalised in the world in terms of polluted air – implementation will build an iterative
at financial close. However, it is clear that with 56 milligrams of pollutant per cubic process of continuous improvement.
technology improvement in renewable metre. By comparison, China’s air had 90 For South Africa, the recent DMRE
power generation and battery storage is mg/m , placing it 15th in the rankings; announcement of the increased
3
continuously driving down its cost. This the world’s cleanest air could be found in licence threshold for renewable energy
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can be clearly seen in the cost comparison Finland, at just 12 mg/m . production by private developers from
between the preferred bidders, as Similar environmental concerns exist 1 MW to 100 MW is an important step
outlined by the Department of Mineral in relation to the impact of fossil fuels on forward. There is certainly a level of pent-
Resources and Energy (DMRE). our increasingly scarce water resources. up demand for opportunities like these
The exploitation of coal has taken its toll in the mining sector – and this can pave a
Comparable cost on water quality in mining regions, and path of technological exploration on our
In its announcement, the DMRE noted considerable water volumes are also home soil.
that the prices for the proposed solutions used in coal preparation and coal-fired Fortuitously, the increase in
ranged from R1468/MWh to R1885/ power stations. Climate change will make commodity prices may place a number
MWh – with a weighted average price of rainfall more variable and difficult to of our local mining companies in a good
R1575/MWh. This indicates that there predict, exacerbating water risks going position to roll out their private energy
is no longer much difference in the forward. generation plans sooner rather than later.

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