As the government’s green power procurement gets back on track, SA’s wind sector is gearing up to deliver a sizeable 14.4GW of power by 2030, but the industry sees grid capacity constraints as a threat to the country’s ambitions.
"The wind sector has much to celebrate but has faced many challenges and continues to do so, grid connectivity being but one of them," Mercia Grimbeek, chair of the SA Wind Energy Association (Sawea), said in the keynote address at Windaba, SA’s flagship wind energy conference held in Cape Town last week.
While the government’s Integrated Resource Plan envisages 14.4GW of wind power coming online in the next nine years, Eskom’s generation connection capacity assessment has startled many in the green energy community as it shows there is now 0MW capacity to connect new power projects to the grid in the Northern Cape, a province rich in solar and wind resources.
And while there is capacity in other provinces, investment in grid infrastructure is lagging nationwide. As such, "the Northern Cape ‘problem’ will be the problem for every area quite soon if nothing is done about it", said Mark Tanton, a Sawea board member.
Tanton said the industry must work with Eskom’s transmission division to ensure there is adequate investment in grid infrastructure and that the planning dovetails with what industry is doing. Much hinges on "how quickly we can get the Ismo [independent system and market operator] up and running", he said.
The Ismo will emerge from the unbundling of Eskom’s transmission business, which, with the distribution and generation businesses, is on track to be legally separated by the end of the year.
As Eskom and the government engage with global financiers on a proposal to accelerate the decommissioning of its coal plants in return for green funding, there may be potential for much more than 14.4GW of wind power in future.
Presenting at Windaba, Crispian Olver, executive director of the presidential climate commission, argued that transitioning SA’s power system to be carbon neutral by 2050 would require the deployment of about 150GW wind and solar capacity, almost four times the total capacity of SA’s coal power plants and requiring an investment of R3-trillion within the next 30 years, as well as expansion and upgrading of the transmission and distribution infrastructure.
Deployment of renewables, Olver said, would have to speed up to at least 4GW installed annually, about 10 times the current pace of new-build.
There is, as Tanton describes it, a "frenetic activity" in the industry. But it cannot be business as usual for the burgeoning green power sector, which has come under scrutiny for being dominated by large multinationals, with SA businesses playing a secondary role.
While it is local companies that typically develop the renewable projects, these are commonly sold on to large multinationals with large balance sheets. This has resulted in the majority shareholding of SA’s green power projects being largely foreign-owned, but has also driven a drop in the price of green power.
In the latest bid window of the government’s renewable energy procurement programme, wind power is expected to come in as low as 50c per kilowatt hour, down from 151c/kWh in the first round.
"The status quo cannot persist," said Tanton of the ownership profile of green power in SA. "It’s naive to think that it can. For the government to properly get behind it ... it will have to change and I think it will actually start changing quite quickly."
Local manufacturing has also been slow going, with earlier plans to establish domestic production lines dashed when the fourth round of the government’s renewables procurement programme faced four years’ delays before being able to reach financial close.
With a fifth round of bidders to be announced soon and more bid windows planned, the programme is gathering momentum. The slashing of regulatory tape around self-generation of power up to 100MW has opened up possibilities for wind power. But localising production will be key.
"It is not sustainable as a country to, for the next many years, be importing everything when you have an ambition of 14GW, which could easily [be more]", Tanton said, adding that the industry should be given certainty that the procurement will take place.
Grimbeek said: "We are now in the position, 10 years on, to leverage off lessons learnt and map the way forward for an increase in local manufacturing.
"We know that successful localisation hinges on a predictable and continued procurement pipeline."
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