South Africa’s solar photovoltaic (PV) energy industry has started to mature as costs come down and capacity rises.
As the nation moves ahead with many of its solar ambitions, the National Treasury said on Tuesday that the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) had been oversubscribed significantly following the latest bid, with total project prices falling dramatically.
Speaking at the Solarplaza conference, in Sandton, National Treasury law director Lena Mangondo said the third round of the REIPPPP attracted over 60 potential solar PV project developers, offering a collective capacity of 3 604 MW.
Six renewable-energy developers were appointed as preferred bidders with a collective installed capacity of 450 MW and total project costs falling to R8.1-billion.
Total solar project costs reach R23-billion
The first round of bidding attracted 28 bidders, with 18 solar PV players selected to deliver 632 MW installed capacity. Total solar project costs during the bid reached R23-billion. This halved to R12-billion during the second round, when nine developers were selected to deliver capacity of 417 MW.
Solarplaza CEO Edwin Koot believed that global solar PV output costs would come down 40% by 2015 and 50% by 2020.
In a statement on Monday, solar energy group Solar Capital noted that South Africa recorded $5.7-billion in renewable-energy investments in 2012, particularly for solar power projects.
75% of SA power still comes from coal
Solar Capital, which was currently developing the 200 MW De Aar solar farm, in the Northern Cape, noted that about 75% of all electricity in Southern Africa was being generated from coal-burning power plants.
The potential for renewable-energy generation was high, Solar Capital president Paschal Phelan said, explaining that, while renewable energy accounted for less than 1% of the energy mix in South Africa in 2012, it was expected to reach 12% in 2020.
South Africa had emerged as one of the world’s leading examples in terms of sustainable government policy on what was becoming a “disruptive technology”, which was providing a market threat for current global power utilities and growing on par with that of the mobile telecommunications revolution.
Speaking at the Solarplaza conference, Phelan said many countries in Europe had suffered, as some governments had “unpredictably withdrawn or taxed their incentive schemes”.
“While Spain, Germany, Belguim and Italy have all encountered turbulence and turnarounds in the last 12 months, South Africa has shown commitment in setting up its solar industry, currently moving into round four, maintaining its incentives and successfully getting projects off the ground,” he held.
It was likely that solar PV would contribute 84 GW/y of energy globally by 2017 and, as solar PV technologies gained ground, European utilities were facing a 9% market share drop.
Over the past few years, the utilities had lost $500-million in market capital, which was forcing them to reinvent their business models and incorporate renewable energies.
Meanwhile, Mangondo said the number of jobs created through solar projects had reached over 20 000 – in construction and operations – over the last three REIPPPP rounds.
Further, the growing solar industry was expected to contribute an estimated R2.9-billion to socioeconomic development in rural regions – 70% of which would take place in the Northern Cape – over the next 20 to 24 years.
By Natasha Odendaal.