South Africa is fast becoming a preferred renewable energy investment destination for both private and public sector investors – good news for the country’s growing electricity demands, emerging clean energy sector and the economy.
The World Bank recently approved a $250-million (R1.5- billion) loan to South African power utility Eskom to develop a wind and solar plant, which will help the country reduce its reliance on coal-based power generation.
The World Bank, which granted the funding through its Clean Technology Fund, will finance a 100-megawatt solar power plant in Upington in the Northern Cape province and a 100-megawatt wind power project north of Cape Town in the Western Cape.
Leading clean energy projects in Africa
The loan will enable Eskom to build two of the largest renewable energy projects ever attempted on the African continent, the World Bank said in a statement. Ebrahim Khan from Wesgro, the Western Cape Investment and Trade Promotion Agency, welcomed the World Bank’s investment into the renewable energy sector.
“These investments are a breath of fresh air and it shows that South Africa is no longer just talking about renewable energy,” Khan said.
“The good news for South Africa is that there are serious ambitions to get our energy mix right and there are more renewable energy power projects in the pipeline that are to be funded by private investors,” he added.
Key investment areas
He said that the Eastern Cape, Western Cape and Northern Cape Provinces have been identified as the main regions to establish renewable energy plants, particularly wind and solar. “Many people don’t know that the Northern part of the Western Cape has higher irradiation than the best locations in Spain and the State of California,” he said.
In the Western Cape, investment is primarily into wind and photovoltaic (PV) solar power. PV solar-power generation converts solar radiation to electricity by means of static panels.
He said that photovoltaics is the main form of solar technology that is used widely on a commercial scale in other parts of the world.
The Northern Cape has been identified as the best area for concentrated solar power (CSP) technology, which uses mirrors or lenses to concentrate a large area of sunlight, or solar thermal energy onto a small area, usually with rotating panels.
Wesgro estimates that about 40% to 50% of the 1 850 wind technology projects and 30% to 40% of the 1 450 PV projects will come to the Western Cape.
According to Wesgro, wind resources in the Western Cape are substantial and among the best in the country.
“We are going for renewable energy in a big way,” he said.
Khan said South Africa has the potential to become a major player in the clean energy sector, with significant interest being shown by investors in the past few months.
Wesgro has also hosted many delegations who want to participate in the renewable energy sector. “Most of these companies are big players,” he said.
Research is still under way into ocean and wave technology, which can also be used to generate energy.
“There are universities in the province that are working on innovations with ocean and wave technologies, but the models have not been perfectly worked out yet,” Khan added.
Construction to start in 2012
Eskom is in the process of building and upgrading existing coal-fired power plants to meet South Africa’s immediate energy needs, but it wants to diversify the energy mix toward cleaner sources of energy.
Last year the World Bank received criticism for approving a $3.75-billion (R29.3 billion) loan for the development of a coal-fired plant in South Africa, but Eskom said the project was necessary to address the country’s chronic power shortages.
Eskom anticipates that the construction of the 100-megawatt wind power project north of Cape Town will start early in 2012.
Possibilities for manufacturing
Khan said that there are good opportunities to establish a manufacturing sector focused on parts and components for the renewable energy sector.
In the wind energy sector, European companies are already looking for suitable sites to set up plants to manufacture components such as blades for wind turbines, as they are extremely cumbersome to transport.
Wind power company Isivunguvungu Wind Energy Converter (I-WEC) has identified Cape Town as its base to manufacture Africa’s first multi-megawatt wind turbines.
Cape Business News reports that a large 42-ton mould, which recently arrived at Table Bay Harbour from China, will be used to manufacture 50m-long rotor blades for the 2.5MW turbines. This exceeds the span of an Airbus wing.
The company plans to start production on its first turbine immediately, in time to set up the final product in Saldanha, northwest of Cape Town, early next year.
According to I-WEC, the new 2.5MW turbines are almost double the size and capacity of the 1.3MW turbines currently used in South Africa.
Each turbine has the capacity to provide enough power to run about 2 000 average South African households for a year.
I-WEC is also the first South African and African company that can manufacture the multi-megawatt wind turbines locally, using local labour. Up to 70% of the turbines’ components will be manufactured in South Africa.
By Wilma den Hartigh