Windlab Africa MD Peter Venn on Windlab’s operations in South Africa and wind energy potential in other parts of the continent.
Unless you’re unfeasibly optimistic, you should be concerned about South Africa’s energy security and its impact on your business and the national economy. A snapshot of just how close we are to a bout of costly load-shedding has been amply illustrated in the last few weeks as supply falters and demand surges.
In one instance, the capacity available to meet demand was 33 986 MW. With demand forecast at 33 384 MW, planned maintenance at 4 711 MW and unplanned outages at 4 916 MW, we had a reserve margin of 251 MW, or 0.73%. It wasn’t quite the equivalent of a few dozen pool pumps and kettles, as an observer quipped, but it was little more than that. Load-shedding schedules are being issued and winter, as the tagline from a popular television series goes, is coming.
From an international perspective, it’s nearly unheard of to have as little reserve supply as South Africa’s. Australia, where my company has its roots, very seldom uses more than 60% of its annual generation capacity, meaning that maintenance can be scheduled. Far from being over- capitalised, it means that up to 10% of generating capacity can be off line at any one time and blackouts will still be avoided.
Many South Africans won’t realise that when load margins are this thin, load-shedding is already taking place in some form, whether it is through buy-backs or some other arrangement. A buy-back is where Eskom pays the heavy users of electricity – mines, smelters and so on – to not use electricity. It’s cosy and it keeps the lights on, but we all pay through increased electricity prices, which, in turn, elevates the prices of everything else.
The recent startling revelation of a 0.9% growth in the economy during the first quarter of 2013 begs the chicken-and-egg question: Do we have a shortage of power because of our low gross domestic product, or vice versa, or both? Whatever the case, the impact of our strangled supply is every bit as serious as the R50-billion we lost during the 2008 outbreak of load-shedding.
The Department of Energy is acutely aware of that, and while Hitachi and Eskom finagle over how to weld boilers, R75-billion of private investment in renewables is under way as part of the first two phases of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). It’s not a silver bullet for our energy crisis and doesn’t claim to be, but it’s an important step-change for this country. South Africa’s 20-year Integrated Resource Plan cur- rently proposes 18 GW of renewable energy on the grid by 2030. The developments will be privately funded.
But what of the criticism of renewables and wind power in particular? A few well-known critics have dog-eared arguments that can be debunked with a glance at the facts rather than supposition, fact-picking and downright disinformation.
In the US, wind has overtaken coal as the greatest form of new installed capacity. Warren Buffett, not renowned for whimsy or investment in pyramid-schemes, has invested more than $6- billion in wind farms in Iowa alone. He’s clearly accepted that some wind hobbyists’ beloved fallacies are simply that – fallacies.
China, which hasn’t been overly fettered by greenie sentiment in the past, clearly sees the economic and environmental benefits of wind energy: its installation of wind power has increased by an average of 66.5% over the last five years. Globally, the average increase in wind-energy use over the last five years has been around 24.6%.
Savvy investors have certainly realised that great wind farms are a result of great wind-mapping, much like good prospecting leads to good mining yields. Being a wind-farm developer is much like being an exploration company and your wind yields are only as good as your research. What the antiwind blowhards ignore, perhaps willfully, is that wind-mapping has in the last ten years improved tenfold.
Ignoring that improvement to justify a rejection of wind energy is a bit like saying you won’t drive a new luxury car because cars in the 1950s had poor fuel consumption and no air-conditioning. Put another way, it’s like rejecting the latest smartphone because early computers filled a room and lacked processing power. It’s a puzzling kind of willful denial, but it’s had no effect on the adoption of wind energy worldwide.
The exploration analogy is apt here: you’d rather narrow your search for a diamond pipe down to 100 m than 10 km. New mapping technology enables us to do this, while factoring in flora and fauna. It has also allowed us to map the whole of Africa, where wind energy provides only 1.1 GW, or 1%, of the continent’s power, with an additional 10.5 GW planned.
So wind holds great promise for continentwide expansion and national economic development, but what about its impact on the rural areas where the farms will be sited? The Eastern Cape, for example, will benefit enormously, as it brings business for everyone from the transport sector, stevedores, construction firms and food services.
No fewer than 1 656 abnormal truckloads will be landed at Coega during the first two rounds of the REIPPPP. Building the province’s 11 new wind farms will require some patience from motorists initially, but the investment will be welcomed. Of the R40-billion investment, the second round of wind projects in the Eastern Cape with an amount of R15.9-billion. Of that, R4.6-billion will be local content investment in the province.
Windlab Africa is involved with two projects that will provide more than 220 MW of wind power to South Africa and represent more than 20% of the wind energy awarded in the first two rounds of the REIPPPP.
The investments that have started will deliver benefits for another 20 years or so and ongoing investment will see wind take its rightful place as part of South Africa’s energy mix and its move toward energy security. It can’t happen soon enough.