SA's renewables sector raring to go, despite policy delay

But the sector is being held back by national government procedure, writes Legalbrief. A senior Energy Department official has confirmed that the government intends to pursue a competitive bidding process for SA's first wave of renewable energy projects, due to be licensed this year. A Cape Times report notes that Ompi Aphane, the deputy Director-General for electricity, nuclear and clean energy, said: 'We're definitely going to have price competition on the different technologies.' Nersa is due to take a decision tomorrow on a review of Refit prices adopted in 2009. Many renewable energy project developers prefer price certainty over bidding processes, pointing to under-delivery of projects associated with lowest-price bidding and lost opportunities such as localisation and skills development, the report notes. Full Cape Times report (subscription needed) Preferential Procurement Policy Framework Act

There is concern that the resumption of the delayed process may be bumpy. Banking group Investec has called for care in negotiating the first round of Refit procurements. The group, which is participating in a range of renewable energy projects in SA, says that while it is keen for the delayed process to begin as soon as possible, it also accepts that it is more important for SA that the first round is concluded successfully rather than hastily. An Engineering News report quotes Investec Capital Markets head of project and infrastructure finance, Mike Meeser, who says there is some anxiety about the fact that the request for proposals for the first Refit capacity, probably involving 1 025 MW, has not been issued, as well as about the regulator's review of the 2009 Refit rates. The report quotes Meeser as saying: 'Given the urgency, as well as the choice that has been made through the Integrated Resource Plan to pursue renewable solutions on a large scale, it is vital that we get the first round right. This will add momentum, which, in the longer run, will raise investor interest, increase competition and lower prices to the consumer.' Full Engineering News report

But there is also optimism about the Refit. Peter Lukey, the Environmental Affairs Department's deputy Director-General for climate change, said the scheduled launch this month of the Refit was likely to lead to positive change. A report in The Herald states that Lukey said the programme had excellent prospects. The report quotes him as saying: 'It can make a dramatic contribution. But, alone, it is not a silver bullet. If we could link it to supplying electricity for the rollout of electric vehicles, and link that in turn to public transport, we could really be onto something.' This solution, he said, would cut across two of the worst contributors to CO2 emissions and climate change - coal-fired power stations and transport. According to the report, Jaco van Loggerenberg, spokesperson for Pretoria-based Optimal Energy, the designer of SA's prototype Joule electric motorcar, agreed that the crossover of green energy into transport had great potential. Full report in The Herald (subscription needed)

If the Western Cape government has its way, it will no longer be necessary to rezone farmland to put up wind and solar energy plants, says a Cape Times report. Instead, would-be renewable energy producers would only need to ask a municipality for 'consent use' to put up wind and solar plants on farmland, says the report which notes that they would have to have the farmer's permission first. The move is designed to remove one of the administrative steps in getting renewable energy plants up and running. The report notes that the move was announced by Anton Bredell, MEC for Local Government, Environmental Affairs and Development Planning, who said he had advertised the proposal to change the legislation for public comment. According to the report, Bredell said this did not affect other legal requirements for renewable energy producers. Full Cape Times report (subscription needed)

To complicate matters, renewable energy projects belonging to state corporations have been excluded from selling electricity under the Refit programme, catching the Central Energy Fund (CEF) 'off guard', says CEF chair Busi Mabuza. Business Day reports that the exclusion could result in the state-owned CEF pulling out of at least one multimillion-rand project, at great cost. According to the report, the company could write off as much as R80m in a wood-waste project at George in the Western Cape, if it decides to walk away from it. To stimulate private-sector investment in renewable energy projects, the government is not allowing state-owned enterprises to hold a controlling interest in an independent power producer contributing to the Refit programme. National Energy Regulator of SA spokesperson Charles Hlebela confirmed last week that this decision had been made. The report notes that Mabuza said that the company's board was considering either selling its majority stake in the George project to a private company, or discontinuing the project. Full Business Day report

Wind farm applications are pouring in. A Cape Times report notes that there are 88 applications to build wind farms around SA. Of these, 40 are in the Western Cape. The Eastern Cape is also being favoured by wind energy developers, with 31 applications to build wind farms in that province. According to the report, the Department of Environment Affairs, which is required to process environmental impact assessments for all wind farm applications, has confirmed these figures. The government has made a commitment that 19.7% of new electricity generation will come from wind power, says the report which notes that spin-offs of wind energy are reduced water use, job creation, establishment of local industries and security of electricity supply. Full Cape Times report (subscription needed)