Wind and Socio-Economic Development in SA
Big growth markets for onshore wind power are presently mostly outside the OECD, with the exception of Turkey. The booming markets are in the developing world, including the global South. This pattern is also broadly true for utility scale, grid connected Renewable Energy more generally.
The inertia gripping traditional wind markets like Spain is also a good metaphor for the largely marooned, international climate negotiations. The Kyoto Protocol is stuck in quicksand and sinking away slowly but surely.
The Sustainable Energy For All initiative launched by Mr Ban Ki-moon, Secretary General of the United Nations in September 2011, marks a new approach of creating solutions on the ground in a bottom-up manner - where implementation does not have to wait forever for political unanimity in a world where many other priorities erroneously appear to be more urgent and pressing. With the critical COP 21 in Paris looming, the world is badly in need of good news about our climate. Perhaps more than anything else, we need to defeat the perception of zero-sum,” either/or” polarity of climate protection and socio-economic development.
This is the geopolitical context for renewable energy in South Africa.
If we drill down to the specifics of what is happing on (and going into) the ground, we see a wind sector that will grow in this calendar year from 10 t0 1,000 MegaWatts installed, from eight wind turbines in a country as large as Germany, Italy and France put together to perhaps 400 turbines spinning by the time we wave 2014 goodbye. This growth will continue in the medium and long term. A bit like the offspring of tall parents, there will be growth spurts and slowdowns, but we know this youngster will grow exceedingly tall in due course.
This is good news. Electrons on the grid at a price that has been as low as 30% below the cost of new coal, even when coal’s huge pollution costs are conveniently forgotten. If it went no further, we would be correct to conclude that climate protection in South Africa is more than affordable – it is profitable.
This though is merely the opening act to the main attraction. The really good news story is that wind power and its sister renewable energy projects in South Africa will unlock rural development and socio-economic upliftment at a scale that is almost certainly unmatched by anything the private sector has achieved or attempted in the country ever before.
How does this work? Much credit must go to the designers of the competitive Renewable Energy Independent Power Procurement Programme, working in the Department of Energy and the National Treasury. With rare perspicacity, they designed the system to ensure that the scorecard rewards projects for the degree to which they invest in communities around wind farms. This might be training, job creation, skills development, education or social care. Each prospective project puts forward a detailed plan that ultimately becomes part and parcel of the contractual terms and conditions granting the developer a 20 year Power Purchase Agreement. The social compact becomes a contractual obligation, and in this manner compliance can be policed and ensured. Best practice on community development in this manner is made into a competitive advantage and the process of evolution is set into play: many are launched, only the best and fittest will survive.
The amounts that will go into communities are truly mind-boggling. Just the presently confirmed wind projects of nearly 2,000 MW’s will invest more than ZAR 5 billion into community development in the next 20 years. The same pattern is occurring in other renewable energy projects. The positive effect on rural communities can only be profound.
And voila, there we have it! Climate protection and socio economic development in one elegant swoop.
In Africa, there are 590 million people without access to electricity. The models might look somewhat different, the solutions might be more distributed, but the principle remains: there is synergy between climate protection, renewable energy and socio economic development.
This is a story that needs to be told.