Mineral resources & energy minister Gwede Mantashe on Thursday night announced 25 new renewable energy projects that will deliver wind and solar energy at record low prices
for SA.
The announcement comes as the country shifted from stage 4 load-shedding to stage 2 amid anger and recriminations at the government for failing to solve the electricity supply problem.
Mantashe has the sole authority to procure new energy for the country, whether private or public.
However, the new projects, which are the fifth round of bids for renewable energy since the programme began, will take approximately 36 months to deliver power to the grid and are therefore not expected to alleviate the supply shortfall any time soon. Once connected, they will add 2,583MW of capacity. Each stage of load-shedding is equal to 1,000MW.
The average cost for wind power was 49c/KWh and for solar 42c/KWh. The low prices put paid to any claim that renewable energy is expensive and is threatening Eskom’s sustainability and costing customers high prices. Eskom coal input costs alone are 42c/KWh, excluding the cost of maintenance and refurbishment of power stations.
UCT professor Harald Winkler said: “We have been making the case for a long time that renewables are cheaper and we are now seeing that in the prices offered to the department of energy. Compared to Eskom’s coal costs alone, renewable energy is far cheaper.”
Mantashe said he hoped prices would drop further.
“We look forward to more competition and reduced prices when we issue bid window 6. We are aiming to release bid window 6 by not later than the end of January 2022.
“Bid window 6 will also include 1,600MW of onshore wind and 1,000MW of solar PV in accordance with the Integrated Resource Plan 2019,” he said.
Mantashe, who is a strong advocate of nuclear energy as well as a proponent of exploiting SA’s coal resources to the maximum, made the point, however, that the new prices are competitive with those offered by Koeberg, which supplies SA’s cheapest electricity. Koeberg was built a long time ago and a new nuclear plant would be far more expensive.
Mantashe has been accused of dragging his feet to free up the energy market and bring on more renewable energy. On Wednesday night, his colleague Pravin Gordhan, minister of public enterprises, fired a broadside at him, acknowledging that the Ramaphosa administration has been slow to tackle the energy shortage. Since the December 2019 crisis when SA hit stage 6 load-shedding, the country has hardly procured a single additional megawatt.
The emergency procurement round that was announced after the 2019 crisis has still not reached financial close and is snarled up in litigation.
Mantashe said megawatts had been added by procurement rounds undertaken by his predecessors and connected to the grid since he became minister. He also cautioned against the belief that renewable energy could solve SA’s electricity supply problems because it is variable energy that depends on the elements.
There was “only” load-shedding at night, he mistakenly claimed, and therefore the remedy offered by additional capacity from renewables was limited. Without tackling the base load, he warned, “We are going to be chasing our tails.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.