AFTER several years in doldrums over mixed signals from government on its power generation priorities, the Eastern Cape’s renewable energy industry is set for spectacular growth.
That’s thanks to the recently released draft of the national reviewed Integrated Resource Plan (IRP). The long-awaited draft national policy, which provides certainty on how South Africa will generate the additional capacity it requires over the next decade, points to an influential role for renewable energy and gas which for the province would mean liquid natural gas (LNG).
MEC for Economic Development, Environmental Affairs and Tourism Lubabalo Oscar Mabuyane believes the IRP will be a “game changer” for the Eastern Cape and will help to spearhead substantial job creation and investment as well as help the province make good on its aspiration to “maximise its already-significant position in the renewable energy and gas sector”.
“What’s exciting about this new way forward is that this policy could open the floodgates for even greater growth for the province. We are open for business and ready – technically, institutionally and in terms of location processes,” Mabuyane said.
Close to 75% of the additional capacity that is being planned will come from solar, wind and gas with the remaining going to hydro and coal, reflecting the trend globally where more renewable power capacity has been added than coal, nuclear and gas power over the past few years.
Mabuyane said the proposed additional energy generation mix affirmed the Eastern Cape’s current energy footprint and the province’s sustainable energy strategy.
“In the case of renewable energy, just over 50% of the additional capacity will come from wind and solar. In this respect, the Eastern Cape has significant resources as well as an impressive existing footprint with over 16 wind farms and one solar farm.”
In the case of gas energy – which is to contribute almost 23% of this new energy – the IRP points to the likelihood of a 1,000 MW gas-to-power project at Coega whose state of the readiness is well-known.
“The province has been preparing for this development for some years and consequently we have experienced a wave of real energy development recently.”
Mabuyane added that it was good news for the province that the policy was “unashamedly underpinned by a least-cost” philosophy while supporting environmental imperatives.
He said that in the case of solar energy in South Africa, the cost of power had been cut by over 75%.
“For the province, the low cost energy mix inclines it towards renewable energy and gas which is, in most cases, more rurally based and consequently could hold the key to remapping key urban-rural economy. When this happens, it will bring large investment, and consequently jobs, to small towns and rural areas.”
But it could also mean more socio-economic investment. In the first four procurement rounds, the awarded farms investment is estimated at R33 billion where R3,8 billion worth of socio-economic investments are made into neighbouring communities over 20 years.
Other benefits include income for community ownership trusts (R7,4 billion over 20 years). Furthermore, black ownership stands at 34% while the local content footprint is at conservative 45%.
The Department is also supporting the development of the sector with other initiatives such as much-needed skills development, supporting transformation, improving local content in manufacturing, leveraging opportunities between investment and socio-economic outcomes as well as supporting municipalities to optimise their energy development opportunities.