Renewable energy in South Africa: Quo vadis?
by Chris Yelland CEng FSAIEE, managing director, EE Business Intelligence

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30 April 2020

South Africa has very significant natural endowments of solar and wind renewable energy resources. These are not limited to the Northern Cape for solar power, or to the east and west coasts of South Africa for wind power, but are distributed widely across the land mass of South Africa.  

This provides South Africa with a unique competitive advantage that can and should be exploited further for the benefit of South Africa and its people.

South Africa’s renewable energy resources

South Africa’s outstanding solar resource is well known.

But recent research by the CSIR has also shown that more that 50% of the South Africa’s land area can deliver wind power capacity factors of greater than 35% if wind turbines with up to 100 m hub height are installed. In addition, more than 70% of the land area can achieve these very high capacity factors if hub heights are increased to 140 m, which is common these days.

Also, while solar power is generated only in the daytime hours, South Africa’s wind resources produce power 24/7, with varying output, and with some pick-up in the evening hours during nine months of the year.

This makes the country’s wind and solar resources significantly better than those of most countries of the world.

The declining cost of renewable energy

It is well known and widely reported that the cost energy from wind and solar power plants has dropped dramatically over the last decade. Competitive auctions for energy from wind and solar PV indicate current prices of around US $0,02 per kWh, and lower.

The last bid window of the South African renewable energy independent power producer procurement (REIPPP) programme by the Department of Energy attracted bids for energy from wind and solar PV independent power producers at an average of R0,61 per kWh, some 3 years ago. Since then, costs have significantly reduced around the world.

This means that the cost of energy from new wind and solar PV is now dramatically lower than that of energy from new coal or nuclear power plants.

Thus, the new approach to meet growth in electricity demand at least cost in the years ahead entails sourcing and giving preferential grid access to as much energy from wind and solar PV generation plant as possible. In this way, the average cost of electricity produced is minimised.

Baseload generation vs. flexible power

As a result, around the world, the old paradigm and approach of dispatching baseload capacity first to meet electricity demand, is being turned on its head. This is simply because energy from new baseload coal and nuclear generation capacity is no longer the least-cost option for new energy.

With the massive reduction in the price of renewable energy from wind and solar PV plant over the last decade to levels now less than one third that of energy from new coal and nuclear baseload plant, a new approach to power generation beyond “baseloadism” is emerging.

It now makes economic and technical sense for electricity utilities to source as much energy from wind and solar PV as possible – limited only by the ability of the renewable energy sector to deliver the planned new capacity requirements, and the ability of the electricity grid to handle this new variable capacity.

Distributed power and geographic diversity

South Africa is a relatively large country with a well-developed transmission grid, and exceptional and widespread natural resources of wind and solar irradiation.

The variable output of wind and solar PV plant – which is affected by wind patterns, the length of daylight hours and the weather – is dealt with to a significant degree by siting wind and solar PV plant widely across the country at a number of identified renewable energy development zones (REDZ), as close as possible to major areas of electricity consumption.

There is no need for renewable energy to be limited to the Northern Cape for solar power, or along the east and west coast of South Africa for wind power. Indeed, the real benefits of renewable energy come from geographic diversity with distributed generation situated close to the customers in the cities, towns, mines, plants, factories, buildings, farms and homes throughout South Africa.

The additional costs of electricity from geographically dispersed renewable energy resources are offset by the reduced losses and costs incurred in transporting the renewable energy to where it is consumed.

At the same time, distributed generation also minimises the cost of grid congestion and associated connection delays, as well as the cost of transmission grid upgrades and transmission losses associated with large power plants situated in limited geographic areas.

“Flexible power” – the new approach

The remaining variability in average output from the distributed wind and solar PV plant can be backed up by “flexible” power generation in the form of gas-to-power, local and imported hydro power, pumped-water storage and new battery energy storage technologies.

While the cost of gas as primary energy for flexible gas power plants is relatively high compared to the primary energy for coal and nuclear power plants, the capital costs are very much lower, and the  gas-to-power plants operate at low load factors, with low associated gas utilisation.

Experience around the word shows that the combination of widely distributed variable wind and solar energy generation, backed up with flexible power generation capacity, provides reliable, flexible, dispatchable, baseload, mid-merit and peaking power at least cost.

The integrated resource plan for electricity in South Africa

Numerous local and international studies, including South Africa’s latest Integrated resource plan for electricity, IRP 2019, show that the option of new wind, solar PV and flexible generation capacity in the form of gas-to-power and battery energy storage delivers the least-cost electricity price trajectory for South Africa in the years ahead, while at the same time providing the lowest water consumption, the lowest carbon emissions and the most jobs.

An integrated resource plan for electricity is intended to be a rational, mechanistic, techno-economic planning process that determines the optimal mix of generation technologies and capabilities, at least cost to the economy, to meet the project the demand for electricity in the years ahead, while also meeting government policy and socio-economic requirements and constraints.

South Africa’s latest integrated resource plan for electricity for the decade from 2020 to 2030, was published by the Department of Mineral Resources and Energy in November 2019. The new generation technologies detailed in IRP 2019 for the years to 2030 is dominated by a blend of distributed wind, solar PV, battery storage and flexible gas to power capacity with no new nuclear power and a significantly reduced capacity of coal-fired power plants.

This is shown in the table below:

Odoo • Text and Image

Myths surrounding variable renewable energy

Unreliable renewable energy

It is often argued that renewable energy from wind and solar power is unreliable and cannot provide reliable power 24/7, when the sun is not shining and/or when the wind is not blowing.

The reality of course that no single energy source on its own provides a silver bullet to the electricity needs of a country, its national economy and its citizens. Renewable energy is used in combination with legacy generation capacity, and well as with complimentary flexible generation capacity.

International experience shows that, together with legacy systems, the combination of distributed variable wind and solar PV generation, backed up with flexible power generation, provides reliable, flexible, dispatchable, baseload, mid-merit and peaking power.

Grid instability

It is also often argued that increased penetration of variable renewable energy will result in grid instability. This is not borne out in practice around the world.

Currently, about 95% of electricity generated in South Africa comes from conventional power capacity – coal, diesel, hydro and nuclear power. The penetration of renewable energy in the South African grid is thus very low, and can be significantly increased before any significant grid stability issues arise

In any case, when such issues arise with higher great penetration, there is much that can be done at an engineering level to resolve these issues.

Loss of system inertia

Another myth that needs to be dispelled is that the loss of system inertia caused by increased renewable energy levels will lead to grid stability problems.

System inertia is not the bogeyman it is made out to be. South Africa has significant legacy inertia. As old coal-fired power plants are decommissioned, the generators and their associated inertia can be converted to become synchronous condensers to maintain the system inertia and to supply reactive power.

Energy storage is too expensive

Already, South Africa has about significant energy storage capacity of about 3000 MW in the form of large pumped-storage schemes in the Drakensberg and Western Cape, and the hydroelectric peaking plants on the Orange River.

Furthermore, new developments in battery energy storage are resulting in large utility-scale battery energy storage systems being applied around the world.

Battery storage systems not only provide flexible back-up for variable renewable energy, but also provide important grid auxiliary services, with multiple revenue streams. These include arbitrage, frequency and voltage support, emergency power, maximum demand control, load-shifting and deferment of capital expenditure.

So what is holding renewable energy and flexible generation back?

Simply stated, the archaic ideological, policy, legal, regulatory and planning frameworks in South Africa, the incumbents, and the vested commercial interests of the status quo are holding the country back.

Significant efforts must be taken to reform the painfully slow, central-planning, command-and-control approach to generation capacity procurement. Government can deliver quick wins by providing sound policy positions and messaging, with an emphasis on reducing unnecessary regulatory constraints.

This should be supported by consistent political, economic and pricing signals to enable customers of electricity and the market to respond to generation capacity constraints, and to be part of the solution, alongside the efforts of government.

This article was written by Chris Yelland for the South African Institute of Electrical Engineers (SAIEE), and was first published in the March 2020 issue of WattNow, the official magazine of the SAIEE.

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