Most of the people that I come across in my comings and goings are generally well read, informed and in touch with what’s happening in South Africa. And yet, when I say I work in energy I am often met with a response of ‘why is South Africa looking at nuclear power but they’re doing nothing in renewable energy?’ or ‘we have so much sunlight, why does the South African government not do anything to make use of this?’ It surprises me that South Africa has done something so incredibly right and so incredibly well, and very few people seem to know about it.
Ladies and gentleman of the public – I present to you the Renewable Energy Independent Power Producer Procurement Programme, or REIPPPP.
I won’t launch into the long and tangled history of it, but some things that are important are:
- It’s a procurement programme run by the Department of Energy
- It seeks to appoint private sector power producers to develop, build, commission and operate renewable energy facilities
- Power generated by these facilities is exported to Eskom’s grid, and Eskom pays a fixed tariff (adjusted for inflation) for a period of 20 years
- Development, construction and operational risks are therefore transferred to the private sector, and government only pays for what is actually produced (excepting where Eskom is unable to provide the grid – but let’s ignore that for now)
- There have been four procurement rounds to date since 2011.
- 79 projects have been awarded, totaling 5.23GW of renewable energy power.
The figures below show how many of each technology type have been awarded in terms of number of projects, and overall installed capacity.
As you can see, the vast majority are wind or solar projects, and most of the solar projects are photovoltaic (that’s the type that you can install on your rooftop to generate electricity – not to be confused with solar water heaters – see here.)
So what does this mean?
- Our national grid at the moment is in the region of 40GW. Most of this comes from coal, which can churn out electricity at all times, so it’s not quite right to compare this directly, but it gives you a sense of how big this procurement programme is, relative to what we already have installed.
- Concentrated Solar Power (CSP) has the potential to store energy in the form of heat, which means that solar energy can be harnessed and used when it is convenient.
- There is a lot of work going on in the area of battery storage at the moment. Big gains in this will mean that other renewable facilities can also become ‘dispatchable’ power stations, where energy is available when it is needed, not when the sun shines.
- Throughout the four procurement rounds, one of the most phenomenal things that has been happening is that the tariff prices have been dropping, and dropping, and dropping. There’s more info on this here for you if you’d like some idea of the extent of this. What this means is that renewables are becoming increasingly price competitive with other more traditional technologies. It also means that when storage options are readily available and affordable the energy picture will be totally changed. For now, renewables may not be painting over our coal heavy picture, but they’re certainly adding a different hue.
- South Africa has done an incredible job. This is important to acknowledge. Countries like Spain have got themselves into trouble with committing to excessive Feed in Tariffs. REIPPPP is a competitive programme, meaning that the country is getting the best value possible. While the initial tariffs in round one may seem excessively high, it took other countries around the world YEARS to get to what we’re seeing in round 4. It’s held as an example as to how these types of programmes should be run, and is also being used as the basis for the procurement of other independent power producers, including coal.
- There are a lot of people who care. Industry associations like SAPVIA and SAWEA are pushing for further renewables to be procured. Municipalities are trying to get involved where they can on smaller scale projects. NGO’s like Sustainable Energy Africa work with government to help with policy development and capacity building. Others like WWF are there to keep pushing government, challenging assumptions and questioning the basis behind decisions made.
- Seeing the successes that have been made in this programme, national government recently announced that they will be adding over 6GW of capacity to the renewables programme. This means that we will be more than doubling what we already have.
- On the side of this all there is also a lot of work going into small scale, distributed installations, like those you see on rooftops. Demand for these small systems is increasing.
All in all it’s a very exciting time.