SAAEA Comments on the RSA RE Windows
South African Alternative Energy Association
To the Portfolio Committee on Energy
By David Lipschitz, on behalf of SAAEA
7th June 2012
Phone: 021 813 9895; 082 900 5903
david@mypowerstation.biz; skype: MyPowerStation
(c) My Power Station Technology cc 2012
Permission is given to copy parts of this presentation as long as the author is acknowledged
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This Presentation
Not much time, so focusing on PV
SAAEA would like to thank Government
for its implementation of the
2003 White Paper on Renewable Energy
“Government should create an enabling environment through the
introduction of fiscal and financial support mechanisms within an appropriate
legal and regulatory framework, to allow renewable energy technologies to
compete with fossil-based technologies.”
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Agenda
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Pause and Reflect. Spaceship Earth.
Sunny Resources
The Fossilized Fuel Industry. How long do we have?
Electricity: an enabler; BRICS: sustainable growth
Citizens Electricity Challenges
Exponential Growth
Grid Parity
Financing Projects: Existing or New Money?
Observations re the Renewable Energy Procurement
Tender process
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Pause&Reflect
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Global Energy Resources
10 TWH in 1990
30 TWH in 2030
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How long do we have?
At 3% electricity consumption growth
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What’s electricity for anyway?
• It’s like ICT, except ICT depends on Electricity
• It’s an enabler to get the country moving
• Fast, cheap, reliable pathways from a to b will
get our economy going
– Communications (Infrastructure)
– Electricity, Population Growth, Resources
• David Murrin: “Breaking the Code of History”
• Can the “Energy Internet” finally happen?
– Thomas Friedman in “Hot, Flat and Crowded”
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BRICS
Brazil, Russia, India, China, South Africa
• Page 69: NPC Report: “Brazil, China, India, Indonesia, South Korea and
Russia will account for more than half of all global growth, growing by an
average of 4.7% a year to 2025, by which time their share of global GDP
will have grown from 36% to 45%.”
– My Comment: It is time for South Africa and Africa to shed
its association with its colonial masters, England, France,
Germany, Portugal, Spain, and the USA, which are part of
the dying Western Empire, and change to a much closer
association with the Asian Tigers, BRICS (China (9.5%)),
Indonesia, South Korea, and of-course the African Tigers:
Ghana (13.5%) (2nd highest), Mozambique (7.2%), Ethiopia
(7.5%), Nigeria (6.9%), Botswana (6.2%), South Africa (3.4%). 36
African countries growing faster than the RSA.
– Qatar (18.7%), India (7.8%), Russia (4.3%), Brazil (2.8%), Germany
(2.7%), USA (1.5%), UK (1.1%), Portugal (-2-2%), Greece (-6%)]
– Growth rates in % are net growth after inflation.
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Electricity Challenges
• For City Dwellers without electricity, NO:
– Water, Banking, Petrol, Transport, Food, Life
– Only 4 days of food in the supply chain
• Everything we do depends on electricity
– We need security of supply
– We need price certainty
• So, how do we:
– Create security of supply? Quickly?
– How do we start reducing prices? Quickly?
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Photovoltaic & Grid Tie Inverter Electricity
= Electronic (ICT) Electricity = The Energy Internet
Riverside Renewable Energy, Holt Logistics
Gloucester Marine Terminal, New Jersey, USA
9MW Roof Top PV, $42m, ~ 110,000 square meters
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Our Environment
Photovoltaic (PV) Production
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Buying and Producing Electricity
Graph in Rand per kwh
City of Cape Town - When do we get to "Grid Parity"?
R6.00
ie when can we make our own electricity cheaper than we can buy it?
For Homeowners using 1,200kwh or more. Plus some other assumptions.
Green Line is production using Net Metering. The red line is buying.
R5.56
R5.00
R4.00
R3.89
R3.00
R2.00
R2.00
R1.56
R1.00
R0.57
R0.00
2008
R0.77
kwh cost of buying
2009
R0.95
R1.14
kwh cost of manufacturing
2010
2011
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R1.32
2012
Fix your price and save
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Existing or New Money?
• New Large Scale Power Stations require
– New Money
• New Small Scale Power Stations use
– Existing Money
• Homeowner and SMME pays R1.32 per kWh
for buying electricity and for producing it!
• Net Metering is an enabler
– With a Wheeling (Reverse Feed) Tariff
– Without a Service Fee
• Buy electricity at R1.32 per kWh; Sell at R1.16 per kWh
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R2.3 trillion
R2,300,000,000,000
• Repayments
– At 10% over 20 years
– R23,000,000,000 per month
• R23 billion per month is what the people of South
Africa will be paying for their new electricity fleet if we
follow the old 20th Century technology path
– 50 million people; 7 million taxpayers
• R3,285 per taxpayer per month
– for capex repayments only
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Portfolio Committee on Energy
• We’ve shown the
– Energy Public Meeting (EPM)
– Possibilities re entry and prospects of growth of
Renewable Energy in SA from business
perspective
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SAAEA Observations re Tenders
• Window 1 & Window 2
– 1,450 MW available
– 1,048 MW allocated for IPPs
– 402 MW available for Under 1 MW systems?
• Homeowners
• SMME’s
Ref: http://www.ipp-renewables.co.za/index.php/press/detail/preferred-bidders-window-1
http://www.ipp-renewables.co.za/index.php/press/detail/preferred-bidders-window-2
http://www.evwind.es/noticias.php?id_not=18891
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• Tender
Speed to Market (1)
– Big Barriers to entry. Keep the locals out!
– Slow
• Eskom overload. Taking Eskom’s planners’ eye “off the ball”
– Failed in the UK, which changed to FITs
– Not everyone is awarded a contract
– Not transparent. Why did some get it & others not?
• FIT Feed In Tariff
– Fast
– Same price for everyone. No favourites.
• Net Metering (402 MW available for Under 1 MW systems?)
– Fastest & Cheapest
– Homeowners and SMME’s pay
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Speed to Market (2)
• Financing Net Metering
– No public finance required! No government debt!
– Allow homeowners and SMME’s to buy ex VAT and
before tax
– Banks should offer bonds at homeowner’s rate
less 1%, eg Prime – 3%. Bank collects the carbon credits.
– Eskom’s announcement on 5th June 2012 re paying
R1.20 per kWh (plus VAT) for electricity removed
from the grid at Standard Time (6am to 10pm) is
welcome and a step in the right direction
• but why is there a minimum 10 kW entry point?
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The Big Energy Myth
• From Dr Hermann Scheer’s Book “The Solar
Economy” pp 169 to 170
– “Once the fear of the small scale has been dispelled,
once RE has demonstrated that it can replace fossil
energy in its entirety, then the aura of the centralised
nuclear/fossil industry will quickly fade.
– Ordinary people are caught up in the myth of big
technology … We need an active and engaged society”
– Trevor Manuel & the National Planning Commission
calls for an active and engaged society
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Contacts
• David Lipschitz, My Power Station
– 021 813 9895; 082 900 5903
– david@mypowerstation.biz
• Alwyn Smith, SAAEA
– 071 637 8466
– alwyn@saaea.org
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