When I was approached to write this column I was given no remit but to write about whatever I wanted. I suspect since I am best known for my contributions on renewable energy and particularly solar photovoltaic (PV) in SA, I thought, best to stick to that. As an advocate of the technology, I find one gets pigeon-holed; as someone who was in investment banking for 25 years, reputationally, it’s an easier mantle to wear.
When I first was introduced to renewable energy in 2009 I thought it was a completely unviable technology for SA. I had done a fair amount of electricity advisory in my years in banking to
intensive energy users and they like their electricity in large amounts – and cheap. So when I was contacted by an ex-colleague to talk about a joint venture on renewables, I entertained his pitch with amused scepticism.
Why, then, five years later, am I a firm (some people would say misguided) advocate of renewable energy, and particularly solar PV? For a country such as ours, facing the growing pains of bringing the majority of our population into the mainstream economy (even after 20 years of ANC government) solar PV can play a catalysing role at every level of society.
If the will is there, we can put electricity in a person’s home tomorrow, not wait until Eskom or a municipality has the budget or the capacity to connect that community to the grid. Renewable energy is the only electricity generation technology that is falling in price – we anticipate by 2020, the prices of wind and solar PV will be at about R0.50/kWh, which will compare to Medupi at around R1.10/kWh.
May 2016
Solar power offers SA a way to bring more people into the mainstream economy
Mike Levington, the vice-Chairman of South African Photovoltaic Industry Association, on renewable energy
When I was approached to write this column I was given no remit but to write about whatever I wanted. I suspect since I am best known for my contributions on renewable energy and particularly solar photovoltaic (PV) in SA, I thought, best to stick to that. As an advocate of the technology, I find one gets pigeon-holed; as someone who was in investment banking for 25 years, reputationally, it’s an easier mantle to wear.
When I first was introduced to renewable energy in 2009 I thought it was a completely unviable technology for SA. I had done a fair amount of electricity advisory in my years in banking to
intensive energy users and they like their electricity in large amounts – and cheap. So when I was contacted by an ex-colleague to talk about a joint venture on renewables, I entertained his pitch with amused scepticism.
Why, then, five years later, am I a firm (some people would say misguided) advocate of renewable energy, and particularly solar PV? For a country such as ours, facing the growing pains of bringing the majority of our population into the mainstream economy (even after 20 years of ANC government) solar PV can play a catalysing role at every level of society.
If the will is there, we can put electricity in a person’s home tomorrow, not wait until Eskom or a municipality has the budget or the capacity to connect that community to the grid. Renewable energy is the only electricity generation technology that is falling in price – we anticipate by 2020, the prices of wind and solar PV will be at about R0.50/kWh, which will compare to Medupi at around R1.10/kWh.
It may be intermittent, but at least I will be able to pay for it. In SA, where the bulk of our population can hardly afford to pay for electricity at the current tariffs, renewable energy may be the one technology most of us can pay for. PV in particular can be highly industrialised at a local level, with rooftop deployment (both PV and solar water geysers) becoming the next installer market.
There is a growing small business industry that supplies solar lamps and chargers.I don’t believe we have scratched the surface of this sector from an industrialisation and local manufacturing potential. With Eskom’s ever-increasing technical, environmental and financial difficulties, increasing numbers of industrial and commercial companies are looking to access some of the electricity they require from alternative sources. With the utility unable to give certainty to customers on even a three-year horizon, what chance does an enterprise that relies to any extent on electricity have to do any kind of sensible long-term planning?
Renewable energy, while exhibiting a certain level of variability, has the ability to give a customer absolute reliability on the price they will pay for up to 25 years – no variability due to volatility in coal/ oil prices or exchanges rates (can’t wait for electric cars to come in). Shortcomings? While we have a world-leading renewable energy procurement, it serves a narrow congregation of large,
foreign independent power producer (IPP) players and has reduced the participation of local players to that of economic observers.
While similar procurement processes globally have created vibrant domestic players in the full renewable value chain, renewable energy IPP procurement has so far failed to achieve the wider outcomes expected of it, particularly in an economy with chronic levels of youth unemployment and a dire need to create new manufacturing and industrialisation. We’ll get there – we are only four years into a long journey.
However, there is an even bigger opportunity for future South African renewable energy companies outside of our borders. In sub-Saharan Africa, there are estimated to be 600-million people who still are denied access to electricity. If we only wanted to get electricity availability to 70% by 2040, there would have to be close to $500bn of spend in new-generation capacity and $360bn on transmission investment. That’s a powerful economic growth story for SA and the region and we need to make sure we participate meaningfully in that development story.