Northern Cape Business 2017-18 edition

Renewable energy Solar

Renewable energy Solar power is changing the energy landscape of the Northern Cape and attracting millions of rands in foreign direct investment. The Northern Cape is attracting hundreds of millions of rands in investment in renewable energy. Most of this money is being put into solar energy plants, with the most popular technology being solar photovoltaic (SV). However, several of the most recent investments have been in concentrated solar power (CSP) technology, a method that offers better storage possibilities. Solar voltaic technology essentially uses many panels to capture the sun’s rays, while CSP normally uses a tower or troughs to concentrate the sun’s rays. With four rounds of bidding finished at the end of 2016, South Africa’s programme to encourage private power producers to bid for and build renewable energy plants has led to 92 projects being approved. Fully 48 of those are situated in the Northern Cape: 35 of these are solar projects. The national programme is known as the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and it aims to add some 6 000MW to the national grid by 2020 (and 13 225MW by 2025). At the end of the fourth window, it was calculated that R192-billion had been invested into South Africa through the REIPPPP, with R53-billion of that being supplied by foreign investors. At the time of writing, the signing of power-purchase agreements with companies that have won bids, had been delayed but national government has repeatedly said that the REIPPPP is definitely approved policy and it will go ahead. The countries of origin of the companies investing in this new industry are very varied. They include Vestas (Denmark), Enel Green Power (Italy), NORTHERN CAPE BUSINESS 2017/18 16

SPECIAL FEATURE Scatec Solar (Norway), Globeleq (United Kingdom), Mainstream Renewable Power and Solar Capital (Ireland), Gestamp Renewable Energies and Abengoa (Spain), SunEdison and SolarReserve (USA), ACWA Power (Saudi Arabia), Tata Power (India), China Longyuan Power Group, (China), Genie (Gulf states), and juwi Group (Germany). Some of these investors are investment funds, some are utility companies expert in power generation, others specialise in renewable energy technology such as wind blades. Every project has a joint ownership consortium or joint venture that includes a local company and a community trust of some sort. Most of the projects approved in the Northern Cape are on a large scale, with big investors obliged to go into joint ventures with local communities, normally in the form of trusts. The provincial government is giving attention to smaller ventures, in the 1.5MW range, with the aim of bringing local investors and communities on board. To support this goal, and to grow the renewable energy sector as a whole, a Renewable Energy Conference was held in 2016. A concrete example of this on a small scale is the solar energy plant established at the rooibos tea factory in Nieuwoudtville by the Northern Cape Department of Agriculture, Land Reform and Rural Development. Any excess power generated is sent on to the Hantam Municipality. The provincial government of the Northern Cape is using clean energy production, supported by the procurement strategy of the REIPPPP, to boost economic growth and development. The province’s comprehensive road network provides a good platform for the establishment of new power infrastructure. The province is connected to Namibia via the Kalahari and the Orange River Basin Corridors, strengthening trade and transport linkages between the two countries. Trade and investment The Northern Cape Renewable Energy Incubator (//NCREI) is a broad-based black economic growth initiative conceptualised by the Northern Cape Department of Economic Development and Tourism, as a response to green economy activity in the Northern Cape, with specific reference to the Renewable Energy Independent Power Producer Procurement Programme (REI4P). //NCREI will be a hybrid incubator approach to enable the development of professional and entrepreneurial capacity of local SMMEs in the province. This is one of the interventions that has substantial potential to contribute towards accelerated job creation, as well as economic empowerment. In addition to being a priority sector in the province, renewable energy also has the potential to unlock various other sectors such as manufacturing and construction, thus offering many linkages throughout the value-chain of renewable energy. //NCREI will also provide local SMMEs an opportunity to grow their businesses under a comprehensive enterprise development programme, thus ensuring that the province builds capacity to ensure a good supply of locally based SMMEs to participate in the localisation aspect of the REI4P. The following are the sector units that //NCREI will create: Renewable Energy; Energy Efficiency; Clean Transportation; Built Environment; Water Management; Waste Management; and Technologies for Green Economy. A business plan for //NCREI is available from the Northern Cape Department of Economic Development and Tourism. Water and wind The Northern Cape has had 12 wind farms and one small (10MW) hydro-electric project on the Orange River approved in the REIPPPP process. One of the earliest wind farms to be constructed in the Northern Cape was at Noblesfontein, about 40km from Victoria West. Spanish company, Gestamp Wind, was an early investor in South African renewable energy when it got behind the Noblesfontein project. Loeriesfontein (valued at R3.5-billion) is owned by a consortium led by Lekela Power, a joint venture between Actis, a private equity company, and Mainstream Renewable Power. Mainstream and various partners have won approved bidder status for wind and solar projects in each of the 17 NORTHERN CAPE BUSINESS 2017/18