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Multibillion-rand renewable-energy boost for EC

The East London industrial development zone (IDZ) will develop a wind farm that will generate in excess of three-million kilowatt-hours a year of electricity, Eastern Cape Economic Development, Environmental Affairs and Tourism MEC Sakhumzi Somyo announced on Wednesday.

He said the IDZ, which was working with a local wind turbine manufacturer, would save R98-million in electricity costs over 20 years and would strengthen energy security for industries based at the IDZ.

The Eastern Cape had a sizeable renewable-energy footprint with independent power producers (IPPs) having secured licences for 12 wind farms and one solar farm.

Somyo pointed out that, not only did renewable energy provide security of supply for the province, but IPPs would invest R1.6-billion in enterprise and social development programmes, which would benefit local communities over the 20-year life of the projects.

Local content for these projects, which was to be procured from within the province, was projected at R7.5-billion and would stimulate the development of localised industries and the green economy, said Somyo.

He further noted that the R3.5-billion Dedisa peaking power plant at the Coega IDZ would come on line later this year. The plant would generate 342 MW of electricity through its open-cycle gas turbines.

Somyo added that the agroprocessing and ocean economy sectors were also expected to contribute to economic growth and job creation in the province.

Edited by: Chanel de Bruyn
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New study forecasts doubling of renewables capacity by 2025

The global installed capacity of renewable energy could more than double to 3 203 GW in 2025 from 1 566 GW in 2012, new analysis by Frost & Sullivan shows.

The study, titled ‘Annual Renewable Energy Outlook 2014’, anticipates an average yearly growth rate of 5.7% and for solar photovoltaic (PV) technology to account for 33.4% of total renewable-energy capacity additions over the period.

Wind is expected to follow with 32.7% of new capacity additions, ahead of hydropower at 25.3%, while other renewable technologies will represent the remaining 8.6%.

Industry director Harald Thaler also expects emerging economies to play a larger role, as the weak economic climate in Western Europe affects support schemes.

More than 130 countries currently have supportive policies in place for renewables, which has translated into a dramatic rise in renewables investment in recent years.

In addition, a decline in the cost of renewable energy, as a result of technological innovation and economies of scale, has also enabled developing countries to adopt these technologies.

The cost of solar PV modules, for instance, have dropped by about 70% between 2008 and 2013, making solar more competitive with fossil-fired power and driving accelerated adoption rates.

Renewable-energy installations in 2013 saw the continued, gradual shift in market power to emerging economies, where economic growth and revised energy priorities will drive a sustained increase in the adoption of renewable energy,” Thaler says.

Edited by: Creamer Media Reporter

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Greenpeace ship returns to SA, highlights solutions to electricity crisis

Greenpeace’s iconic ship, the Rainbow Warrior, has arrived in Cape Town for a month long tour of the South African coastline, as part of a Greenpeace campaign to highlight its conviction that renewable-energy investments are the solution to the current electricity crisis.

The environment-friendly ship will dock at Cape Town’s V&A Waterfront from February 9 to 16.

Greenpeace Africa executive director Michael O’Brien Onyeka said welcoming the Rainbow Warrior to South Africa at a time when the country was threatened by stage 3 load shedding was really important for Greenpeace Africa.

“The country is in crisis, and it is clear that the solution to load shedding is not more investments in coal and nuclear, but [rather] in removing the barriers to renewable energy.

“The ship will be used to highlight how renewable energy puts power back into people’s hands, and is already delivering on time and on budget,” he said.

The new Rainbow Warrior is one of the most environment-friendly ships built to date and is at the cutting edge of clean technology. She replaces the Rainbow Warrior II, which retired on August 16, 2011, after "22 tireless years at the campaigning frontline" and the original Rainbow Warrior, which was bombed in 1985.

The original Rainbow Warrior is best known for helping to end nuclear testing in the Pacific, blocking coal ports and closing down destructive fishing operations.

Greenpeace Africa campaigns for a just transition away from coal and nuclear energy and towards a clean energy future based on renewable energy in South Africa,” said O’Brien Onyeka

“The return of the Rainbow Warrior is a true honour for Africa, and we are confident that this visit will empower Greenpeace Africa with the tireless spirit of the global organisation that is required to win major campaigns and build on the successes achieved so far on the continent,” he added.

“The Rainbow Warrior is an important campaign tool for Greenpeace globally, in order to expose environmental crimes and advocate for solutions for the many citizens that are suffering from environmental injustices. Having the Rainbow Warrior here today is a reminder to our leaders on the continent, that the time to act is now.

“We cannot, and we should not, destroy our legacy to our children,” said O’Brien Onyeka.

Edited by: Creamer Media Reporter
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“Zero cost” renewables the shortest term supply solution to ease energy crisis

Dear members

Please find below a media release that the South African Renewable Energy Council (SAREC) issued.

28 January 2015

“ZERO COST” RENEWABLES THE SHORTEST TERM SUPPLY SOLUTION TO EASE ENERGY CRISIS

The South African Renewable Energy Council welcomes the conclusions of a recent CSIR report showing that the net cost of South Africa’s renewable energy in 2014 was less than zero and reiterates that the industry is willing, ready and able to do much more to ease the country’s electricity shortage, now predicted to lead to load shedding for the next 3 – 5 years.

The Council points out that the value of renewable energy in a constrained electricity system is clear and has previously been pointed out by The University of Stellenbosch Centre for Renewable and Sustainable Energy Studies (http://www.crses.sun.ac.za).

The CSIR report “Financial benefits of renewables in South Africa in 2014”, released on 21 January 2015, demonstrates that the 1,600 MW of renewable energy installed by December 2014 has saved the country ZAR 5.3 billion in diesel, coal and avoided load shedding while costing the country only ZAR 4.5 billion in tariffs.

“The results of this study truly underline the economic value of renewable energy to the South African electricity consumer”, said Mike Levington, board member of SAREC who has been participating in recent discussions between government and business. “While Round 3 of the Renewable Energy Independent Power Producer Procurement Programme (“REIPPPP”) has seen the prices for electricity from the major renewable technologies generally fall well below the likely cost for new Eskom power, the constrained grid and the very high costs for diesel/load shedding have meant that renewables built under Round 1 saved the country more in 2014 than they cost.”

The CSIR report noted that the country was saved ZAR 3.7 billion in diesel and coal fuel costs and a further ZAR 1.6 billion through the avoidance of 120 hours of load shedding.  Government’s far-sightedness in establishing REIPPPPP in 2011 is now yielding dividends in making a measureable contribution to easing Eskom supply problems and will contribute even more as the plants presently under construction come online on a continuous basis through 2015 and beyond. Moreover, it is expected that the preferred bidders for Round 4 will be announced soon, potentially putting another 1,100 MW of renewable energy into the pipeline to produce electricity. The CSIR report was done on conservative assumptions and did not factor in the job creation and socio-economic benefits of the REIPPPP programme, with more than ZAR 11 billion already pledged by the industry for investment into rural communities over the next twenty years.

Professor Wikus van Niekerk of Stellenbosch University is unequivocal in his response: “We are electricity constrained as a country and using far more peaking power for mid-merit generation than we should”, he asserted. “Renewable Energy, particularly wind and PV, are “fuel-savers” and could therefore make a significant contribution at this time, saving Eskom and the country money. There are however a number of barriers to particular for roof PV projects put in place by Eskom that need to be addressed to allow even Eskom-subsidised projects to connect to the grid.   A reasonable feed-in tariff for rooftop PV – lower than at the Eskom generation cost at Medupi and Kusile – could facilitate a number of roof to PV project to come online, still in this year.”

Pancho Ndebele, also of the SAREC Board, stresses that renewable energy is the most feasible supply option that can be deployed at scale within the timeframe of the severe electricity crunch. “A total of 6,000 MW of renewable energy projects were bid in Round 4 of REIPPPP”, he stressed. “These are projects that have done all feasibilities, received environmental and all other regulatory approvals and have been assessed by lending institutions as being financially sound. They are ready for implementation and will be funded by private capital at very affordable rates. Importantly, a number of these projects can be constructed and connected to the grid in a 14-24 months’ time frame. In light of the load shedding and fuel savings demonstrated in the CSIR study, these projects can take considerable pressure off diesel purchases and load shedding schedules. Other supply options, when large, tend to be ten or more years away, and if smaller tend to be still more than five years away. Renewable energy is a viable part of the solution to the present supply crisis. With about ZAR 1 billion per month being spent on diesel and load shedding costing the country ZAR 87/kWh, we should aggressively increase our renewables ambition.”

Carryn Bateman, who represents SESSA on the SAREC Board, adds that the present crisis is one to which SESSA members have a lot to contribute. “Rooftop Solar PV is perhaps the fastest supply side solution available”, she points out. “And it can be done at significant scale close to where the electricity is needed“. Her colleague James Green, who heads SESSA’s solar water heater division, agreed and said that solar water heaters had the potential to significantly alleviate the electricity crisis. “We can install about 50,000 high pressure units before year end”, he predicted, “saving the country a usage of 8 kW daily in each case, and also removing all peak from those electric geysers going solar. This a fast track for getting both GWh and peak off the grid, with payback to consumers in less than 5 years.

Proponents of wind energy are equally enthused. Mark Tanton, SAREC Board member representing SAWEA, stressed that for wind, 0.6 GW of wind installed saved the system real cash on a net basis, because the pure fuel savings value of wind was 0.23 R/kWh higher than the cost of the wind power produced. “If avoided load shedding is added, the value of wind power to the country is even more compelling”, he asserted.

Notes to Editors:

For more detail about SAREC, see www.sarec.org.za
For interview requests and more detail, call Marilize Stoltz at +27 (0) 11 214 0660
For the full CSIR media release, see http://ntww1.csir.co.za/plsql/ptl0002/PTL0002_PGE157_MEDIA_REL?MEDIA_RELEASE_NO=7526622

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DoE tests market for near-term power demand reduction offers

South Africa’s Department of Energy (DoE) has issued a formal appeal for companies and individuals to provide it with information on possible near-term solutions to reduce or shift electricity demand, as well as to immediately improve supply – the responses will guide the design of future procurement processes.

Government’s Independent Power Producer (IPP) Office released the request for information (RFI) in mid-December and responses need to be submitted by February 2.
 The RFI documentation notes that demand response and/or distributed generation strategies are “critical” to improving the reserves needed by the system operator to better employ available generating capacity and to allow for higher levels of power-station maintenance. The anticipated daily shortfall, the RFI adds, is likely to be between 3 000 MW and 5 000 MW until additional generation capacity is introduced.

Differing seasonal requirements are also highlighted, with savings targeted for between 9:00 and 21:00 in the summer months from September to April and between 17:00 and 20:00 from May to August.

The RFI follows the adoption by Cabinet in December of a five-point plan designed to stabilise the electricity supply sector, which has become increasingly prone to disruption, owing to a delay in Eskom’s build programme and a decline in the performance of the utility’s aging generation fleet.

The paid-for advertisement also acknowledges the depth of the electricity problem, describing it as a “crisis” – a stark deviation from the official stance adopted by Eskom, which has continually avoided using the word crisis to describe the state of the power system.

Included in the Cabinet-endorsed plan is a directive that private IPPs, cogeneration and demand-side solutions be harnessed with the support of various procurement programmes. Also emphasised is an ambition to manage demand “through specific interventions within residential dwellings, public and commercial buildings and municipalities through retrofitting energy efficient technologies”. The DoE believes that demand-side could free up 500 MW within six months.

This approach has been strongly supported by Business Leadership South Africa, which says big business stands ready to support the implementation of the five-point plan, including through the accelerated demand side management interventions.

The specific objective of the RFI is to gather information and test the market for innovative demand response and/or distributed generation solutions. The DoE notes that similar exercises proved useful ahead of the design of the renewable-energy procurement process, through which nearly 4 000 MW of capacity has been procured. In addition, market testing is helping guide the design of baseload and cogeneration procurement initiatives.

This RFI is particularly interested in companies and individuals with dispatchable demand response solutions, as well as in energy efficiency, load management and fuel switching proposals. In addition the RFI is also seeking information on distributed generation prospects, despite the fact that the regulations are not yet fully supportive of allowing individuals and businesses to feed excess capacity back into the grid.

“This RFI is intended to generate information to assist the department to assess the size, type and nature of the possible solutions available to enable it to develop appropriate strategies, as well as the options with solutions to implement such strategies,” the department explains.

Responses are being sought from independent demand-response aggregators, developers of innovative demand-side management projects and distributed generators, but the DoE stresses that the RFI will not be used as a basis for prequalification.

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Blooming renewables in South Africa

Due to the increasing threat of climate change, the key role that energy plays in the interactions between societies and resources towards a sustainable development has gained broad attention. As renewable energy sources (RES) become more competitive in relation to other energy sources, they create another opportunity to attract additional investments in favour of a greener economy.

In 2008, South Africa experienced a game-changing energy crisis due to severe capacity constraints in its energy infrastructure, thus forcing the country to tackle its energy challenges and initiate a transition to a low carbon economy. It is therefore no surprise that the potential of RES has gained increasing traction in South Africa.

On the eve of a global energy shift, South Africa has developed the Renewable Energy Independent Power Producer Procurement Programme (REI4P) to increase the share of renewables in its energy mix. Stemming from private sector participation in the electricity industry, the 2003 South African White Paper on Renewable Energy had set ambitious targets to facilitate future power generation capacity. Against this background, REI4P launched in 2011 with an initial target of 3,725 MW, divided into three bidding windows. The first and second bidding windows took place in 2013 through the Department of Energy, and the third one concluded this year.

Besides an increasing share of RES in the South Africa energy mix, further benefits have been derived from the REI4P, such as job creation in the renewable energy sector and the reduction of renewable energy prices. For example, between the first and second bidding windows, wind energy prices have fallen by 22 per cent, and solar prices by 40 per cent. In September 2013, South Africa incorporated its first solar power plant into its national grid under the REI4P. In three years, the REI4P has contracted 64 projects, and unprecedentedly managed to attract private investors in the South Africa energy infrastructure sector.

However, the REI4P has faced several setbacks. Among other issues, connection to the national grid backbone has encountered difficulties, due to insufficient investments in infrastructure, as well as national grid extension, with people in remote areas remaining off-grid. In addition, while the two first bidding windows were dominated by a wide range of developers, the third one witnessed a decrease in local and small companies, which found it harder to compete in a context of decreased prices.

In the process of an increasing RES share in the national production of energy, two main lessons can be learned from the South Africa REI4P experience: the need for comprehensive distribution and transmission planning on the one side, and the establishment of stronger links between the national bulk electricity provider and the Independent Power Producers (IPP) on the other side.

Fresh on the heels of the REI4P success, South Africa has also gained a stronger position on the international energy scene. The REI4P has propelled the country as a top three investment destination worldwide for renewables, and South Africa has therefore rapidly grown into a key energy partner. In 2010, US Secretary of State, Hillary Clinton and South Africa’s Minister of International Relations and Co-operation, Maite Nkoana-Mashabane, launched the US–South Africa Strategic Dialogue to advance co-operation on energy issues, among others. It includes the pursuit of common interests regarding RES, energy efficiency, peaceful nuclear co-operation, carbon capture, and shale gas exploration technologies. In 2013, both countries agreed to work more closely on solar, wind and biogas as clean energy sources, in particular for the REI4P’s extended fourth and fifth windows in 2015.

Written by Dr Agathe Maupin, SAIIA researcher working on energy and climate change. This article was written from the 20th annual Conference of Parties of the Nations Framework Convention on Climate Change (COP20), in Lima, Peru, and first published in Outreach magazine on 2 December 2014.

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Answer to energy problem is blowing in the wind

FOUR groups of 12 hippies sitting in circles, some sheep grazing and a large concrete tower with some shaky scaffolding tenuously attached to it. Those were my first impressions of the community of Tvind that I visited in the summer of 1977.

Tvind, in Denmark’s west Jutland region, was an experiment in alternative schooling that included the concept of a travelling school, which would visit Third World countries and help to find ways to beat poverty. Although the Tvind schools can claim to have had an effect on pedagogy in Denmark — and they attracted a lot of controversy along the way — it is the large concrete tower that was under construction when I visited that has had the biggest effect. What the school was building was one of the country’s first big wind turbines.

The Tvind wind turbine started producing power in 1978. Thirty-six years on, Denmark’s wind industry employs 25,000 people in 350 companies with a turnover of more than R160bn.

As a visiting teenager, I thought the idea of the wind turbine was quite cool, but part of the attraction was that it was so alternative, so far removed from the mainstream. It was not possible to imagine back then that Denmark, just more than three decades later, would be providing almost 30% of its energy needs from wind power. The goal is to reach 50% by 2020.

One of the reasons that the forward-thinking teachers of Tvind started on the wind turbine was to prove to the world that nuclear power was not the only way forward. The antinuclear movement in Denmark was very strong in the 1970s. "Atomkraft? Nej Tak" (Nuclear? No Thanks) stickers were everywhere.

In 1985 the Danish parliament ruled out nuclear power stations being built on Danish soil. About 80% of the country’s wind turbines are owned by private shareholders or co-operatives. The island of Samsø has so much renewable energy it is now "carbon positive" and all of the inhabitants have a stake in the island’s wind turbines and solar panels.

SA’s journey into the realm of wind energy began quite recently, but there are some advantages to being a late entry into an industry. For one thing, the South African and Danish governments have a Renewable Energy Programme co-operation agreement, which was signed in 2013. This includes assistance in the creation of a comprehensive wind atlas that will map wind resources around the country.

Working with the scientists and engineers at Denmark’s Technical University (DTU), the same institution that worked on Tvind all those years ago, brings huge benefits to the South African partners such as the South African National Energy Development Institute, the co-ordinator of the atlas project, the South African Weather Services, the Council for Scientific and Industrial Research and the University of Cape Town.

The Renewable Energy Independent Power Producer Programme (REIPPP), whereby private companies bid for the right to build projects, has so far favoured wind. By the end of the third round of bidding, 1,983MW had been allocated to onshore wind projects. The simple average cost of kilowatt hours was reduced by nearly 30% to 74c by the time the third round was completed, the South African Wind Energy Association (SAWEA) said.

The association further calculated that round three of the REIPPP would save SA more than R15bn over the next two decades, using the price of power to be generated by the Medupi coal-powered power station as a comparison.

The Danish ambassador to SA, René Dinesen, has described the programme as "very transparent and very effective, setting new international standards in the field".

SA’s wind sector is growing fast. Before the programme began, the country had a total of eight turbines. The first two rounds of the programme will see 500 constructed and by 2030 about 9,000MW of wind power will be available to Southern Africans.

A good transmission grid is vital if renewables are going to play a big role in power generation in the subcontinent. When Denmark has excess wind power, it is sent to Norway to pump water uphill into reservoirs for later use in hydroelectric power generation. Lisbeth Jespersen, the deputy head of the Global Green Growth Forum in the Danish foreign ministry, says getting turbines to Africa presents "no problem" but the key is "getting the energy out to the people".

A few kilometres north of Tvind, where the old wind turbine still produces energy after all these years, there is a test site for wind turbines that are quite staggeringly big. The national test centre for large wind turbines at Østerild is run by Denmark’s Technical University and hosts turbines being tested by Siemens, Vestas Wind Systems and EDF Enérgies Nouvelles, a French company using Alstom technology.

The latest 8MW turbine being tested by Vestas stands a total of 222m above ground, with a tower measuring 140m and rotor blades measuring 80m.

What a few teachers started in the 1970s has morphed into something really big. The huge moving towers looming over a hillside north of the Limfjord in northern Denmark are a sure sign that wind power is growing and it is coming to SA very quickly.

• Young was an exchange student in Denmark in the 1970s. He has recently visited the country on a study tour as a guest of the Danish foreign ministry, International Media Support and the State of Green.

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Department of energy delays frustrate power producers

RENEWABLE energy independent power producers say that they are concerned that the latest round of successful bids have still not achieved financial closure, creating uncertainty over planned investments in the sector.

Previous rounds of the renewable energy independent power producer procurement (REIPPP) process have been a great success, with 21 renewable projects, which will provide 1,076MW, connected to the grid. The renewable programme is viewed as important means to help close the power gap in a period when SA’s energy supply is extremely constrained.

However, the third round ran into problems, initially due to a delay in undertakings by Eskom.

Eskom has also indicated that it cannot invest in grid connections for further rounds of the REIPPP.

Eskom said on Tuesday that it had now provided quotations for all the third round project connections. The next stage, which is the management of the financial close, is the responsibility of the Department of Energy. An initial deadline of the end of July was shifted to November 24. As the close must be staggered to avoid a knock on the currency, the South African Renewable Energy Council has raised doubts over whether the deadline will be met.

The Department of Energy did not respond to several inquiries over two days on whether it would make Monday’s deadline.

The outstanding success of the first two rounds of renewable bids, generated about R120bn in investment, says the council. It says that these investments are now in jeopardy as uncertainty grows over subsequent rounds.

CEO of the council Johan van den Bergh says at some firms production of wind turbines was stalled due to the delays while several manufacturers of photovoltaics were running at 2% capacity, despite millions made in investments.

"The viability of manufacturing facilities and the accompanying jobs and companies may be threatened if finality does not come before year-end. Uncertainty about the timing of announcing the preferred bidders for round 3.5 (for concentrated solar power only) and round 4 has also added to discomfort."

Eskom recently made it clear that it is unable to fund grid strengthening any further than the requirements of round 3.

In reply to questions Eskom said on Tuesday it was investing in the transmission infrastructure in the Northern Cape to accommodate about 500MW of renewable energy. This would be more than adequate to meet the requirements for rounds one, two and three of the renewable energy bids, it said.

However, the power utility would not be able to provide for the needs of round four as this was not included in the plans submitted to the National Energy Regulator of SA under the multiyear price determination which runs from 2013-14 to 2017-18.

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Youth will help fulfil potential hidden in renewable energy

TODAY 60 young South Africans graduate from the Kimberley Maths and Science Academy. Set up by Anne MacLean in 2006, with the specific goal of providing talented students from poor backgrounds with an opportunity to achieve their potential in the gateway subjects of maths and science, the academy has over the past four years provided these Grade 9-12 pupils with continuing support in maths, science and English through afternoon classes and holiday academies.

My company, Mainstream Renewable Power, has supported this initiative for the four years because we believe SA needs young engineers who will help build a new sustainable future for the country. This is increasingly important as SA, like many countries, faces a long period of economic slowdown, described as secular stagnation.

Former US treasury secretary Larry Summers has revived this economic theory, which was first articulated in the 1930s, to describe the extended slump that followed the US’s great crash, where the difficulty of "maintaining sufficient demand to permit normal levels of output" was addressed only by Franklin Roosevelt’s New Deal and the very significant stimulus to the US economy that occurred through the country’s mobilisation for the Second World War.

A recent report from the International Monetary Fund has analysed the effect of secular stagnation on economies such as SA’s, where "serial disappointments in growth have led to a ratcheting down of medium-term growth forecasts". Its remedy for this cycle of weak demand and anaemic output is to develop infrastructure, both to stimulate demand, and to create the framework for a more robust economy. Infrastructure investment boosts demand, says the report, "through the short-term fiscal multiplier, similar to other government spending, and by crowding in private investment…".

In a report written in 2012 economic analysts at the Centre for Economics and Business Research argued that investment in renewable energy in the UK would have a larger than normal multiplier effect due to the stagnation of the economy. I suspect that this effect would apply in SA as well.

It was the opportunity to develop new infrastructure with the government and other partners that enabled us to create Mainstream SA. The government’s Renewable Energy Independent Power Producer Procurement Programme has delivered 1,400MW of operational plant with an immediate further pipeline of 3,700MW of new electrical infrastructure, which is providing additional electricity to the national grid to help relieve unserved demand, and bringing economic activity to many economically marginalised rural areas of the country. It stands as a successful global model of the benefits of delivering infrastructure in a weakened economy, both in terms of stimulating demand and attracting investment.

It is important not to underestimate the programme’s effect of "crowding in private investment". In only three years the programme has attracted $14bn of private sector capital, which has in itself acted as a significant stimulus to the local economy. It is quite probable that these projects will be self-financing for the public purse — although the government provides a fixed price for the electricity produced, the cost of doing so will be paid back through general economic growth, and a reduction in the country’s debt-to-gross domestic product ratio.

Companies such as mine have grown in SA as we seek to develop and build new infrastructure under the programme. As the government looks to review its medium-term energy strategy I would urge it to extend this programme, and procure a consistent amount of new renewable energy every year for the next 20 years.

At present more than 40% of the capital expenditure necessary to build wind and solar power plant in the country is used to acquire goods and services supplied from SA. This figure could be much higher if the government were to commit to the programme over the next 20 years. I have made the point with the government on a number of occasions that no matter which boilers are chosen for a coal plant, or which steam or gas turbines are deployed, they are unlikely to be manufactured locally. However, with wind and solar photovoltaic, broadly everything can be manufactured here, given sufficient demand.

This month’s opening of the GRI wind turbine tower plant at Atlantis, Cape Town, is a clear example of this developing trend. Not only will equipment be manufactured for the domestic market but the rest of sub-Saharan Africa could also be supplied from here.

In addition, the renewable energy producer programme has delivered new generation plant to the grid on time and on budget, with a levelised cost (the net cost to install a renewable energy system divided by its expected lifetime energy output) of energy less than that forecast for a new coal plant. This is a remarkable achievement for the government, and is indicative of the extensive solar and wind resources available in SA.

Why is all of this important to the 60 Kimberley graduates? In a powerful analysis of the effects of secular stagnation on SA’s economy Sanlam group economist Jac Laubscher wrote last week that one of the dangers was the potential for this stagnation to reduce the contribution of education to the development of human capital.

His remedy lies in structural reforms that would include improving the education system, investing in physical infrastructure and increasing incentives for low-skilled workers to enter the labour market.

I agree. That is why Mainstream is backing the Kimberley Academy and investing in new national infrastructure. The academy’s stated vision is to provide support and opportunities to foster success and ultimately increase the number of future scientists, engineers and leaders of the calibre needed for the growth of SA’s economy. That is an ambition that we, and the other supporting partners across government and the private sector, fully endorse.

I anticipate that the Kimberley graduates will have a huge part to play in helping to design and build the new infrastructure that will return this country to a period of significant growth.

There is another factor at work, which gives rise to optimism that we are headed in the right direction, and that there is a route out of secular stagnation. It is the effects of new technology, such as renewable energy, on the economies of developed and developing nations.

In a book published this year, The Second Machine Age, the authors argue that it can take some time for breakthroughs in technology to fully affect productivity. Though US factories first used electricity in the 1890s, productivity growth didn’t accelerate until the 1920s. This, they argue, was because electric motors at first just replaced steam ones. It was only when staff accustomed to the steam era retired, to be replaced by younger colleagues familiar with electricity’s potential, that plant was reorganised to take advantage of electricity.

In a recent review, a commentator asked, in the context of secular stagnation, whether behind the apparent global slowdown, we may also be seeing a pause as we adjust to new technology. That is certainly the case in SA, as we shift from old and dirty fossil fuels to the sustainable renewable resources of the future. It will be our Kimberley graduates who will deliver this future for us.

O’Connor is CEO of Mainstream Renewable Power.

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