JOHANNESBURG, April 2 South Africa's new
renewable energy tariffs are a breakthrough in the country's
efforts towards a more sustainable climate change and energy
agenda, analysts and environmentalists said on Thursday.
The country's power regulator set renewable energy tariffs
this week to boost investments in the sector and to meet South
Africa's target of having 2 percent of the country's power
output or 10,000 gigawatt hours (GWh) from renewables by 2013.
Analysts said the approved tariffs surpassed the
expectations of even the most optimistic industry players and
will be key to drive the industry forward, especially to
generate power from wind.
"This is the biggest change in the electricity generation
sector since utility Eskom was established in 1923," said
Tristen Taylor, energy policy officer at think-tank Earthlife.
"The tariffs look fair, now it's up to the renewables
industry to deliver."
Frost & Sullivan energy analyst Sipha Ndawande said
renewable energy project developers had so far attracted
interest from international investors, but launching of their
projects was delayed by lack of adequate incentives.
"The government has taken a huge stride forward with the
revised renewable energy tariffs," he said in a statement.
The tariff sets out the price per unit of electricity to be
paid for renewable energy generated by private power producers.
The country will pay 1.25 rand for a killowatt hour produced
from wind, 0.94 rand for the same from hydro, 0.90 rand from
landfill gas and 2.10 rand for power from concentrated solar.
Taylor said the only disappointment was that micro
generation projects were not included in the tariffs, but added
the power regulator had promised to include them in the future.
Ndawande said it would take up to four years before the bulk
of wind farms will be commissioned.
"The wind power market will be driven by an increasing
number of joint ventures between project developers with local
knowledge and private equity investment firms, backed by the
support of international wind turbine manufacturers," he said.
The new tariffs will also serve as an incentive for
municipalities to become involved in power generation, he said.
South Africa, the largest emitter on the continent, depends
on coal for 90 percent of its electricity needs. Moves to
diversify to other energy sources have so far stalled due to a
lack of policy framework and incentives for investors.
The renewables tariff has long been anticipated to stimulate
large-scale investments, with other incentives mulled by the
government for the future.
While only a few concentrated solar power projects are
expected to be undertaken in the country due to the large
capital investment and expertise required, Ndawande expects an
exponential rise in the number of landfill gas projects.
"If we assume that 85 percent of the announced large scale
renewable energy projects are executed in the country,
electricity produced from renewable energy will overshoot (the
10,000 GWh) target quite substantially," he said.
(Reporting by Agnieszka Flak; editing by James Jukwey)