Tag Archive | solar energy

Delays hinder start of SA’s renewable energy programme

News of yet another possible extension emerged regarding the R100bn Renewable Energy Independent Power Producer Programme (REIPPP) tender awards being staged by the department of energy (DoE) has emerged. The initial deadline to make the final tender award announcement was originally 19 June 2012.

Only days after energy minister Dipuo Peters had indicated that the deadline had been extended by DoE to the end of July, a further announcement has come from her office that the 28 renewable-energy project developers, identified in December as preferred bidders, have again been notified that “the timing of financial closure may be delayed beyond the end of July”

Originally, immediately following president Zuma’s state of the nation address, the economic cluster’s chairperson minister Sibusiso Ndebele said the tender programme on calls for renewable projects “has lived up to expectations” and that even more tenders were expected.

The initial 28 projects selected in December as preferred bidders under the REIPPP as part of the renewable energy independent power producer (IPP) programme would facilitate R50-billion-worth of international investment, with more to come from subsequent bidding rounds, it was said at the time.

The initial projects are collectively supposed to represent1 416 MW of wind, solar photovoltaic and concentrated solar power capacity.

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First round of IPP producers named for grid supplies

In the first round of allocation of bidders in terms of the department of energy (DOE) renewable energy allocation procurement programme, 39% of the allocated 3625MW for independent power producers has been decided upon.

Parliamentarians were told that the number of “passing bids” was 66.5% of those submitted, resulting in a total capacity of 1415 MW of the 3725MW to be procured being taken up at this stage.

By far the greatest number of projects was solar energy projects, either solar voltaic or solar CSP, with slightly over 30% being wind projects. Twenty eight projects in all were found to be acceptable.

No biomass, biogas, landfill or small hydro projects were submitted in this round, or “window” as it is referred to by DOE.     All projects decided as acceptable were from Eastern, Western and Northern Cape. In all some 68 applications were received.

Ompi Aphane, acting deputy director, DOE, told the portfolio committee of energy that small 100MW projects would be handled separately, the original procurement documents for the bidders for larger scale projects having been released during August 2011 and the compulsory bidders conference held in September for these and for the second window now to be considered.

All documents have been treated as confidential by all parties and are still treated as such in view of the fact that the process is ongoing.

Evaluation of projects on the issue of land rights where, Aphane said, South African law “was antiquated and not clear”, have and might give difficulties. The same applied to municipal issues insofar as relationships and responsibility might be concerned, he said.

On the whole such issues would be the concern of the supplier to sort out but it had to be remembered, Aphane said, that at the same time all such problems were “everybody’s problems and it would serve South Africa best to sort them out at every level.”

On land matters as well, there might be problems in agricultural areas concerning projects that involved good arable farming land but very little in the way of problems were land was fallow had arisen so far or had been pointed out by the evaluators. Registration of leases or proof of land use application had to be shown in submissions.

Commercial legal issues, economic development priorities, financial oversight and technical issues had all been studied and a large evaluation team made up of international legal experts, well known local legal evaluation teams and technical consultants had been assembled. Financial evaluation had been undertaken by Ernst and Young and PricewaterhouseCoopers.

Under questioning by parliamentarians it became evident that all competitors had to be at least 40% South African owned. When asked if there were any landfill, biogas, and biomass projects that had become evident in early bidding under the second window period, Aphane said that such had not arisen at all, nor were they expected to be, mainly because they would be of a minor nature insofar as they would fall under projects providing 100MW or less.

Hydro projects had not arisen. He also commented that projects emanating from “fossilisation processes” were disallowed.

On whether the same extended and expensive evaluation process would be applied to the second and third round of bidding, Aphane said that “DOE had learnt much from the processes applied in the first round” and that the ground rules established by both experts, consultants and official bodies could be applied henceforth.

Questions on final pricing per unit of electricity arose and deputy director general Aphane said that this could not be discussed at this stage for reasons of security but in his mind as the bidding progressed he would expect to see the final price dropping.

DOE was working itself on a figure of something in the region of “R2.75 to R2.80 a unit” before bidding opened. This may go down, he said, but the final price had to apply to all involved in all bids.

Aphane confirmed in answer to questions that the “position with regard to legal difficulties on the licensing of independent operators with NERSA, the national energy regulator, had been resolved”.

Further questioning from parliamentarians resulted in Aphane confirming that the current IPP energy exercise was not in any way connected to the South African government overseas investment exercise with foreign companies on energy renewables, known as SARi.

On finance, once all bidding was completed, the three windows were closed and the final results were known and contracts granted, Aphane said, DOE was particularly aware of the problem of a sudden importation into South Africa of a large quantity of equipment from overseas and the effect this might have upon the rand.   Steps were in hand to counter this, probably by phasing in start dates.

Final questioning came from parliamentarians on the issue of land once again, particularly when the issue of litigation by present land owners arose either on matters of expropriation or proximity.

Aphane said that DOE could not be involved in such matters, which were the supplier’s problem.  However, broadly speaking, if any such problem arose in terms of it becoming a national problem, it would then naturally become a “South African problem as a whole” and this would have to be dealt with. DOE would monitor the situation.

The exercise regarding the “whole question of smaller 100MW or less, self-sustaining and possible minor contributions to the national grid” would be studied at a later date, he said.

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Global Finance Needed for Renewable Energy

If carbon emission targets are to be met, department of energy (DOE) told Parliament, then countries needed effective international finance instruments put in place to assist in creating renewable energy source industry infrastructure. The department was reporting back on the recent international global warming conference held in Durban.

In the absence of the minister of energy and most senior (DOE) officials due to the presentation by the president Jacob Zuma of the infrastructure plan announced in his SONA address earlier during the week, Mokgadi Modise, chief director, clean energy – DOE,  presented a departmental oversight on the Durban COP17 conference.   She noted that “bottom up” solutions were needed in all countries including South Africa to achieve advancements in the renewables clean energy with the appropriate solutions, if carbon emissions were to be reduced worldwide. There was too much “top down” application at present.

Modise said that that most countries had already indicated their un-willingness to answer key political, questions on the Kyoto Protocol, well before the Durban conference and that the hosting of COP 17 for South Africa, presented considerable problems for the country as hosts if a better outcome was to be achieved than the multitudinous disappointments experienced at the Copenhagen COP 15.

Focus at Durban was also on the “operationalisation” of the Cancun agreements at COP 16.

Modise outlined the “side event” on 26-27 November in which DOE participated and co-hosted with the United Nations Framework Convention on Climate Change (UNFCCC) secretariat to present the 12th Designated National Authority (DNA) in order to crystallize common views and communalize information before the main conference. Challenges at the DNA were that certain countries, such as Italy, were notable for the lack of data provided on their domestic energy statistics, rendering it difficult to obtain overall global factors and make proper conclusions.

Later in the meeting she said that the UNFCCC was working on sector-specific “data templates” and those countries would have to align themselves to data delivery protocols. These were to be delivered to all in the course of time. However, much was overcome at the DNA meetings, Modise said.

Other “side events” at COP17 in which DOE participated were many, including an SA energy oversight presentation and the launch of a pilot solar energy project at ILembe municipality by the president of SA, demonstrating South Africa’s keen interest in renewable energy as a practical issue on the ground.

A factor that emerged from COP17, Modise said, was that considerable advances had to be made urgently as far as international access to financial resources investment in renewable energy projects were concerned in order to “scale up” progress in this area.  Finance structures with international sourcing had to be put in place, she said.

Also, improved incentives to energy participants were needed in both the renewables and electricity energy fields in order to encourage different forms of energy creation.

For clean energy solutions to work globally there had to be an improvement in the support by governments generally.  However, she said, in terms of local business and industry in SA, DOE was convinced that both BUSA and commerce generally “had come to the party” on targets and their participation in DOE objectives within the framework of what South Africa had agreed to internationally” and that this was understood generally by the SA industrial and commercial community as a result of publicity.

Modise singled out wind and solar issues for discussion and told parliamentarians that DOE was working very closely with DTI on this subject but under questioning, was unable to provide any targets in terms of both energy figures or give timeframes.

On the subject of research and development in various energy sectors, she admitted that in South Africa there was little in the way of a sufficient base of technology on all forms of renewable energy but that much of this could, and would have to be, outsourced. Hence the plan to involve PPIs.   Whilst Modise drew no specific references to biofuels, she did note that the “way forward for DOE” was to apply “rigorous monitoring, reporting and verification on carbon mitigation effects”. She said domestic outcomes from the National Climate Change White Paper, approved by cabinet last October, were now going forward for conclusion by May 2012.

Seven projects on renewable energy had been approved and a further 21 were under investigation, she said.    These were to provide some 1 415.52MW of power representing the first IPP phase and other “windows of opportunity” for IPPs would occur in March and August this year.   She said she would supply the committee separately with lists of successful bidders and those being seriously looked as a separate exercise, in the light of time constraints in the particular meeting.

The White Paper on Energy Efficiency was still at the stage of “engagement with the department of the environment on how to unpack what energy sectors were responsible for what and what target applied to each and what the contributions expected were to be.” All stakeholders were involved, Modise said.      The final date for the country’s energy strategy as a finished document remained as May 2012, she noted.

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WWF warns that carbon tax must come to SA

World Wildlife Fund (WWF) warned South Africans that  “by not having a carbon tax to pay for carbon reduction programmes, the result was  too expensive for human well-being”. They were addressing the parliamentary committee on energy on outcomes of the COP17 conference on global warming, held recently in Durban.    WWF said that SA achieved the outcomes it needed at COP17 inasmuch that SA delegates had interceded sufficiently to prevent the breakdown of the Kyoto Protocol on African soil.   Nevertheless, there were still, in the opinion of WWF, massive “ambition gaps” in global warming objectives and that the “citizens of the world as a whole are still held hostage by the major developed countries”.

WWF representatives said South Africans should be very proud of the way this conference had been run; the high standard of input from the department of energy (DOE) and the contributions made by South African experts towards “a just transition to a sustainable environment.”

The most important achievement at COP 17 in their view was the setting up of a Green Climate Fund, although WWF admitted there is no funding income at this stage. Nevertheless, WWF said that whilst these funds may never reach the proportions expected, there was little doubt that money would start flowing in.

On the positive side it was to be noted, however, that not only had the “firewall” that had come about between developed and developing countries been broken down to some extent but that  carbon dioxide reductions targets expressed at earlier COP conferences were being realized as serious issues and not “pie in the sky” warnings.

At present, South Africa faced a carbon constrained future and hopefully it seemed had realized thus but the country was now at the point where it could be a market leader on the issue, or as WWF warned, it could be a “laggard reflecting technology interventions applied too late.”

“We are still treating every problem as if we only had a hammer and every challenge was a nail. The country had to start thinking outside the box, find new solutions and stop falling back on the coal as public enemy number one”, WWF said.

Whilst South Africa, WWF said, was not a country with large land-areas under forestation, the overall principle that 20 percent of global carbon emissions are caused by forms of deforestation –greater than emissions from every car, truck and plane on the planet combined – such facts still applied to South Africa.   Even if countries fulfil their current mitigation pledges, the world will still faced between a 2.6ᵒC and a 4°C scale of warming, which would leave the country in a perilous state.

Coal burning still remained the greatest exuder of carbon emissions and South Africa found itself therefore in a delicate position. Ways had to be found around these issues, whilst energy efficiency was still a totally underestimated answer for South Africa as a tool to fight global warming, WWF said.

They noted that SA, consequently, was “only behind China and India in carbon emissions” but it was to be noted that China had “already smelt the coffee” and was instituting changes. South Africa, they said, should join with China in the search for innovative programmes.

On carbon tax, WWF said that “SARS was an effective body and we should build on their abilities and clear with them a long-term scale-up trajectory of tax collection, starting on a low-scale manner in order not to upset development.”

On the country’s energy programme, WWF said that government has a direct and very powerful influence in the electricity sector and in the light of the benefit of this, in terms of the IEP, more could be achieved. There was economic  over-reliance on the mining sector for answers in energy planning generally but no single factor – whether it be energy security; job creation; CO2 emissions; water impacts or social impacts – should be “allowed to trump each other” in the search for answers.

WWF attacked fracking as a fuel industry practice. Air pollution from shale gas extraction was going to be a major problem if allowed, worse by far than coal they said. “Indeed, fracking is not even an option”.

WWF also noted that carbon intensities of methane gas were, according to US government survey results, excessive and fracking therefore did not fall into a low carbon future at all.  Underground water resources within a 17 mile distance from a well were contaminated and job creation opportunities were transient and temporary in nature.

Until the fuel companies can provide better data that could qualify and quantify a clearer future for this process, then the moratorium should not be lifted, WWF said. No specific fuel company was mentioned.

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