“This ends three years of waiting and uncertainty since the preferred bidders were first announced in April 2015, and is a significant step towards a truly sustainable energy vision for South Africa and Africa as a whole,” says Greg Austin, Marketing Director of juwi Renewable Energies, in the wake of the signing of 27 Renewable Energy Independent Power Producer (REIPPP) projects including the Power Purchase Agreements with Eskom on 4 April 2018. The signing will enable R56 billion of new investment in the economy over the next 2 to 3 years, which will immediately contribute to significant growth in the economy and job creation.
According to the Department of Energy (DoE), the 27 projects to be signed under REIPPP Bid Windows 3.5 and 4 are expected to create 58 419 full-time equivalent jobs for South African citizens, mostly during the construction period and mostly for the youth.
“Renewables have massive job creation potential,” commented Austin. “In future, even more local content and ownership will be required in renewable developments leading to even higher job figures. The three Bid Window 4 solar PV projects that juwi will construct and operate in the coming years, will create more than 5 000 jobs during both the construction and operational phases, over the projects’ lifetime.”
Global investment trends towards renewables
“Since 2015, more money has been invested in renewable energy than in all other power generation types combined. In 2017, some 58% of all energy investments went into renewables (see Bloomberg new energy outlook 2017 report), while less than 10% has been invested in nuclear globally,” added Amiram Roth-Deblon, head of global business initiatives for juwi AG.
According to the Bloomberg report, 10.2 trillion USD is expected to be invested in new power generation capacity worldwide to 2040. Of this, it is anticipated that 72% will go to renewables.
The report also states that wind and solar will account for 48% of installed capacity and 34% of electricity generation worldwide by 2040.
“Money managers look at risk and return – renewable energy ticks both these boxes and the introduction of hybrid and other storage solutions offer added security,” said Roth-Deblon.
“The RE sector brings real socio-economic benefits to residential, commercial and industrial users in South Africa. It has to be a key pillar for economic development for South Africa, and the continent. We have the resources, we have the ambitions, and we have the need. For renewables to realise its potential, to create employment and to be attractive to investors, it is crucial that we learn from the recent past so that the programme isn’t a stop-start process, but is sustained within a structured energy vision that feeds into the IRP and aligned government policy,” concludes Austin.
An energy vision for the future
“We need an energy industrialization vision for South Africa that responds to existing policy and flows into the Government’s Integrated Resource Plan (IRP), and unlocking the current bids sets us on the course to achieve this.
“In the context of what we now have – a monopolized electricity sector that’s in a very weak financial shape – we need to seize the opportunity to restructure a new system where Eskom is still the enabler and partner in the energy programme; where underperforming and end-of-life coal mines are decommissioned; and where South Africa takes the lead in Africa in renewable energy development.
“We should be aiming to achieve a minimum of 100GW of renewables in the next 30 years and setting up to become the leader in Africa and an example to the world of environmentally clean and sustainable power.”
Austin states that Eskom is a key player: “Eskom’s core business is transmission and distribution and they do this very well – this must remain their core role in the future. At the same time, Eskom should be embracing and supporting a master energy vision for the country at the forefront of which should be renewables, which are more cost effective and attractive to investors and have the highest job multiplier effect of all generation technologies. Eskom must be a key player, but not the player.”