SA Energy Minister signs 27 renewable energy projects

Energy Minister Jeff Radebe has officially signed 27 renewable energy projects, setting the path for diversified sources of energy to enter the energy mix.

“It is with great pleasure that I announce the signing of the agreements for the 27 projects procured under the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) Bid Windows 3.5 and 4.

“The procurement of the 27 new projects is the biggest IPP procurement by the Department of Energy to date, representing a total of R56 billion of investment and about 2 300 MW of generation capacity to be added to the grid over the next five years,” said Minister Radebe who signed the projects on Wednesday.

Signing the projects, the Minister said the IPP programme will not only benefit the economy but the consumer as well.

“This investment of R56 billion is injected by the private sector into the economy, with no contribution from government other than support to Eskom in the event of a default by the buyer. This will have a positive impact on the economy and competition in the energy sector will certainly benefit the consumer,” said Minister Radebe.

The Northern Cape will receive the majority of the investment with 15 new wind, solar PV and CSP projects followed by the Eastern Cape which will add another four new wind projects to their province. The North West province will also add four new solar PV projects.

The Western Cape will add another two wind projects to their portfolio, while Mpumalanga will have its first IPP project (a biomass project) and the Free State is adding one small hydro project to their portfolio.

Minister Radebe said the signing of the agreements is re-confirmation of government’s commitment to renewable energy.

“A solid partnership with the private sector in the generation of electricity, which includes among others coal and gas, while pursuing our energy transition objectives for the future,” he said.

Minister Radebe said the new foreign and local direct investment provides a strong economic growth and will assist the economy in loosening the grips of severe fiscal constraint and create much needed jobs.

“This investment will certainly have a positive effect and contribute to the much needed jobs in the rural areas where these projects are located.

“Energy drives sustainable economic development and growth, and should take its place at the centre of a growing economy as directed by the National Development Plan (NDP) 2030,” said the Minister.

The NDP as one of the objectives of the plan, requires 20 000 MW of renewable energy by 2030.

The Minister said in the coming months, resources will be deployed, coupled with the strength of partnership in the private sector on the African continent, to mobilise and optimise the endowment of energy resources.

“I look forward, whilst powering our country and the region, we will ensure the empowerment the people of, South Africa, the region and continent,” said Minister Radebe.

Renewable energy projects to cut carbon emissions

Energy Minister Jeff Radebe says the signing of the 27 renewable energy projects is expected to result in a reduction of the carbon dioxide (CO2) emitted by 8.1 million per year.

“The renewable energy programme is [confirmation of] South Africa’s commitment, together with 195 other countries around the world, to the Paris Agreement for the reduction of CO2 emissions worldwide. It also makes us part of the ever and fast changing global world of a renewable energy industry.

“I can proudly say that it is also an effective climate change mitigant and a water-smart programme. The 27 projects are expected to offset 8.1 million tonnes of CO2 per annum,” said the Minister Radebe.

The Minister made these remarks when he signed the projects in Pretoria on Wednesday.

With energy being the biggest consumer of water, Minister Radebe said the devastating impact of the current drought, specifically in the Western and Northern Cape provinces, over the last few years has highlighted the impact of climate change and water security.

“Generating electricity using renewable energy is an efficient way to minimise water consumption in the energy sector. The projects, once fully operational and at maximum capacity, will save 9.6 million kiloliters of water per annum compared to similar MW hours of electricity from fossil fuels. This is equivalent to the water needs of more than 1.2 million people a year,” said the Minister.

The renewable energy programme will further stimulate an indigenous renewable energy industry and contribute to socio-economic development and environmentally sustainable growth.

Renewable energy means affordable electricity

The renewable energy projects are expected to offer cost competitive rates for electricity.

“The estimated, average portfolio cost for all renewable energy technologies under the Renewable Energy Independent Power Producer Procurement Programme has dropped consistently in every bid round.

“Indications are that prices will continue to decrease in future rounds as demonstrated by the recent Solar PV and Wind prices elsewhere in the world. The lower prices coming from the renewable energy projects will provide the much needed relief to indigent households under the current economic conditions, said Minister Radebe.

The national energy regulator, Nersa will continue to play a critical role in ensuring justifiable tariffs to the consumers, while allowing investors in electricity generation to receive a fair return on investment.

“We have to acknowledge that we may not always be achieving the low prices as reported in other parts of the world, however there is a necessity to ensure support of the programme to the transformation objectives of our country,” said Minister Radebe.