South Africa shows Australia how to do green energy

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South Africa’s latest tender for renewable projects has attracted $3.5 billion of investment, lower costs, cutting edge technologies, and a bunch of leading international developers that have all but given up on Australia. Will the lessons ever be learned?

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South Africa is pushing forward with its ambitious renewable energy rollout, announcing overnight it has awarded contracts for another $3.4 billion of renewable energy developments, with 19 wind, solar and hydropower projects totaling 1,043MW getting the nod.

South Africa has much in common with Australia. It relies heavily on coal for its electricity (85 per cent) and has a similar sized grid (41GW). But it has chosen to kick-start its target of sourcing at least 30 per cent of its electricity requirement from renewables by 2030 with a series of competitive tenders that will allocate contracts for a total of 3,725MW of capacity. It reasons that once this is built, the rest of the 17,000MW of renewable energy required to meet the target will flow.

The second round, which attracted 79 proposals, was announced last night and produced a significant reduction in technology costs over the first round in December – with the average bid for solar PV projects down 40 per cent to 164.5c/kWh ($A0.199/kWh) from 275c/kW ($A0.33/kW). A total of 9 solar PV projects totaling 417MW got the nod.

Only one solar thermal project was awarded, a 50MW parabolic trough facility known as Bokpoort CSP that will produce energy at 251c/kW ($A0.29c/kWh). This compares to two solar thermal projects in the first round – a 50MW solar tower plant with dry cooling and 2 hours storage, and a 100MW parabolic trough plant with three hours storage, both owned by Spain’s Abengoa – which bid an average 268c/kWh ($A0.325/kWh).

In the wind section, the average price fell to 89c/kW ($A0.107c/kWh) from 114c/kWh in the first round, with 7 projects totaling 562.6 MW getting the nod. Two small hydropower projects were also awarded, while a tender for 100MW of small projects (5MW and less) will be held in coming months.

The contrast with the Australian situation could not be any more stark. While Australia has a mandated renewable energy target, large scale developments have been at a standstill for much of the last few years. And on emerging technologies such as solar, little has happened. It is interesting to note that two of the most progressive international solar companies, Abengoa and Acciona from Spain, will be building their latest technologies in South Africa.

For Abengoa, which walked away from the Australian flagships process in frustration over delays and process, it will be their first development of its solar tower technology outside of Spain and it will test the very latest developments in dry cooling and solar storage, and will deliver dispatchable solar power. It says it will invest $1.4 billion in the newest, most efficient solar technologies.”

Under different circumstances, that development might have occurred in Australia. South Africa’s Department of Energy, however, has identified solar thermal as a potential strategic advantage for its country.

Acciona, which recently scaled down its offices in Australia, will build a 135MW wind farm, and also a 74MW solar PV facility. It is teaming up with the biggest infrastructure group in Africa, Aveng, to build the projects.

Australia has so far eschewed the competitive tender process – now popular in Europe, China, the US, and Latin America, with the exception of the ACT Government, which has just begun the process of allocating bids for 40MW of solar PV under tender. By the time South Africa installs the bulk of the 1,194MW of large scale solar PV from its first two tenders by 2014, the sum total of Australia’s rollout is unlikely to be much more than 50MW.

The other notable achievement from the South African tender was that the amount of local content in the projects jumped significantly to 41 per cent in the second round from 28 per cent in round 1. And the government expects even better pricing and economic development terms in the next three rounds.

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9 Comments
  1. Alastair Leith 8 years ago

    Wouldn’t it be great to know Martin Ferguson read this and it gave him pause for re-educating himself.

  2. Just saying 8 years ago

    Mmmm, interesting that there’s no mention of how angry communities across Australia are because of the noise pollution and other issues around living close to wind turbines. Also no mention of the many people that reluctantly have abandoned their properties because they are finding it unbearable to live with the constant humming and vibration.

    • Gillian 8 years ago

      Do you have any numbers for your claims? Or are you just spreading rumours?

      There’s also no mention of Australian community wind projects and community support for concentrating solar thermal in Port Augusta.

      I guess Giles wrote an article, not an encylopedia.

  3. David Lipschitz 8 years ago

    Australia is way more advanced in the RE field than South Africa. Since 2003, the South African government has done a major amount of GreenWashing, ie saying one thing and doing something else.

    Now South Africa wants credit and acclaim BEFORE it does anything.

    Let’s reserve our judgement until 2015.

    • Andrew 8 years ago

      David, as someone working in the renewables industry in South Africa these developments are definitely happening, no GreenWashing this time!

      • David Lipschitz 8 years ago

        Good luck Andrew. I’m also in the industry. I got in when the government announced Feed In Tariffs in 2008. I was actually at the meeting in Parliament in November 2008. So far I have invested about 6,000 hours of my time and R2m cash. It has been an incredible ride and I am much in demand.

  4. Peter 8 years ago

    South Africa’s not a great energy role model:

    – New mega-coal power stations
    – New multi-billion nuclear power stations
    – Shale gas plans
    – Huge coal exports
    – Eskom monopoly
    – Grid issues/power shortages

  5. Ray Wills 8 years ago

    Forecasts of pricing in renewables always overestimate/overstate the actual cost of renewables.

    This article ‘The true cost of coal power’ http://www.skepticalscience.com/true-cost-of-coal-power.html

    includes US EIA projections of 2016 levelized costs for different power generation sources published in 2010 from 2009 data.

    (US EIA analysis available here http://205.254.135.24/oiaf/aeo/pdf/2016levelized_costs_aeo2011.pdf)

    It is interesting to compare the numbers quoted for South Africa in 2012 provided by Giles above versus 2009 projections of 2016 prices by the US EIA – the figures for SA in 2012 are already in the low end of the range of projections US EIA made for 2016!

    solar PV: SA 2012 $A0.199/kWh vs US EIA 2016 range $A0.159-0.324/kWh.

    solar thermal: SA 2012 $A0.29c/kWh vs US EIA 2016 range $A0.192-0.642/kWh.

    wind: SA 2012 $A0.107c/kWh vs US EIA 2016 range $A0.082-0.115/kWh.

    Projections from agencies and bureaus forecasting future energy costs of renewables are universally well behind the actual cost curve of the technology because of very conservative views of how quickly technology is adopted (assumed to be slow) and how quickly prices decline (assumed to fall slowly).

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