Renewable Energy, a thrifty solution to Loadshedding

Updated: Mar 18, 2021

While it has been 15 years since Eskom’s rolling blackouts brought inconvenience and economic decline to South Africa, continuous power cuts plague the nation as loadshedding once again returns. South Africa should brace itself for a protracted period of intermittent power cuts for at least another five years as Eskom faces a severe electricity supply shortfall to the national grid. Eskom chief executive Andre de Ruyter announced that there would be continued electricity supply shortfall of approximately 4 000 megawatts over the next five years. Knowingly, renewable energy solutions present the most obvious and economic solution to the problem.

Renewable energy experts have long hoped that solar and wind power would someday become the cheapest way to generate electricity, allowing the world to shift away from fossil fuel. That day has now arrived, much sooner than expected. The status quo could pave the way for renewables to eventually account for the lion’s share of electricity production, far beyond today’s 11 percent share.

Since its promulgation in 2011, a total of 6,422 MW under the Renewable Energy Independent Power Producers Program (REIPPP) has been procured from 102 IPP projects in 4 auction rounds. 3,876 MW of the procured capacity is operational and made available to the grid.

The South African power system currently consist of generation options which are about 39 GW installed capacity from coal, 1.8 GW from nuclear, 2.9 GW from pumped storage, 2.2 GW from hydro, 3.8 GW from diesel and 3.7 GW from renewable energy made up of wind, solar PV and CSP

Experts have been expecting a decline in prices. But what has been such a game changer is the rate at which these prices have fallen. Every year for the last decade, electricity from solar and wind has ended up costing less than experts predicted it would.

Renewable energy is now comparable with the cost of building new coal and nuclear capacity. Existing, older power plants already have the capital investment sunk, so they are cheaper — but, in the case of South Africa at least, many of these plants are reaching retirement ages.

This has changed the landscape. There is now a cheap, clean alternative for power generation. There’s no longer this problem of do we decarbonize our power sector and have more expensive electricity — in which case it negatively affects our economy. We’re now finding that because it’s cheaper, it’s actually beneficial to produce greener electricity.

Switching to renewables requires far less investment into your power sector than if you were to build new coal or nuclear power plants. That means a lower electricity price, and that has impacts on everything in the economy. A lower electricity price reduces the cost of production, and increases profit. At the same time, it helps households, because spending less on power means you can spend more on other things. From that perspective, you’re actually stimulating the economy when you’re building renewable energy. In South Africa you’re looking at the potential for more than a million additional jobs being created by 2050 if we move to renewable energy.

In South Africa, it makes sense for us to build renewables. We’ve got a very well-developed grid, and if we’re generating solar or wind power it’s just a matter of connecting those sources to the grid. South Africa has sufficient land to build these power plants. And I think more importantly, because the resource, the solar and wind, is so good in South Africa we can basically build it anywhere in the country without making it significantly less efficient.

It is likely that government will have to review schedule 2 of the Electricity Regulation Act, which will help bring an end to load shedding in South Africa. The change will effectively allow for private energy generation in the country outside of the embattled state power utility Eskom.

“Ease the regulatory environment to allow for unlicenced generation up to 50MW, and announce bid window 5 of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP).

South Africa is actually at the perfect place to be switching to renewable energy. A lot of our coal power plants will be decommissioned by 2030 to 2040, so we need to start building new capacity. The question is, do we build new coal capacity, new nuclear capacity, or do we build renewables? According to predictions, South Africa could have 70 percent to 80 percent from renewables by 2050.

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