South Africa and the Northern Cape in particular, has some of the best solar resources in the world, which places SA in a very competitive position when it comes to harvesting this abundant resource. SA Business Integrator spoke to Pieter Oosthuizen, Asset Director at Globeleq South Africa Management Services, to find out more.
Oosthuizen says the harvested energy can be used to either supply electricity for the South African electricity market, or as a cost-effective energy source that can be used in the production of green fuels such as hydrogen. He says the planned upgrade of the transmission grid into the Northern Cape will further unlock access to this solar resource and will enable many additional solar generation projects that are shovel-ready. The cost of solar energy, even with Covid and Ukraine supply chain shocks, remains cost competitive relative to other technologies, and utility-scale solar farms can be built within two years.
Opportunities for ESD
Solar power plants have created opportunities in communities that would not have been able to do so on their own. Oosthuizen says the availability of the resource in some of the isolated and underdeveloped areas in the Northern Cape has brought focus to these communities and the potential for economic development that has led to employment opportunities and opportunities for small businesses to become part of the industry supply chain.
Over R100 million each year is invested in the Northern Cape alone, through various socio-economic development projects, ranging from education to health and small business development programmes that have resulted in improved livelihoods and quality of life for the mostly rural communities in the Province.
“With Power Purchase Agreements spanning over 20 years, independent power producers have an opportunity to create sustainable livelihoods and self-reliant communities over the lives of the Agreements, an outcome that will have a high socio-economic impact on the Province and the country,” says Oosthuizen.
Challenges in developing solar power to become more mainstream
Oosthuizen says the only significant remaining challenge for solar power and photovoltaic (PV) solar in particular, is its intermittent nature.
Even though storage technologies have evolved and are becoming more affordable, it is still challenging to store very large amounts of electric energy for later consumption cost-effectively. Hydroelectric pumped storage facilities have been the traditional South African method for energy storage but have limited capacity within the South African power grid.
Battery storage technologies can also be used to address this challenge but are still rather expensive and not easy to implement at the required scale.
“The way to address this intermittent nature of PV solar power is therefore not only through energy storage but also by making solar generation part of a basket of generation technologies to better reflect the electricity demand curve. Electricity systems of the future will require more flexibility to respond to demand with an increasing contribution from solar,” he adds.
How solar power can be used to assist with Eskom’s challenges
Oosthuizen says solar generation is one of the most cost-effective and expeditious ways to address the capacity constraints within the South African generation fleet and will play a key role in addressing the capacity challenges that Eskom is facing.
The flexibility and scalability of solar PV generation also make it easy for consumers and industries to self-generate, thereby reducing the demand being placed on Eskom’s generation fleet.
“The lifting of the generation license requirement cap to 100 MW has also opened up the market for industrial consumers to enter into private offtake agreements which would further reduce reliance on Eskom and stimulate private investment into large-scale solar generation. The first two 100MW projects were recently licensed by the developer SOLA for NYSE-listed miner-based Tronox,” he says.
According to an IPCC Report, “long-term mitigation goals could be achieved with accelerated adoption of solar PV and wind generation, if the electricity sector decarbonises by phasing out coal entirely by 2050, even if CCS (carbon capture storage) is not feasible before 2025”.
Other renewable energy sources
Oosthuizen says that given the abundance of solar and wind resources and the vast amounts of available land in South Africa, it should definitely be technically possible for the country to make a total transition away from coal by 2050, with green hydrogen replacing gas as the transition fuel supporting more renewables.
“Through the transitional period, the renewable generation will have to be supplemented with more flexible generation technologies including battery storage, gas turbines in the medium term, and green hydrogen-fuelled turbines in the long term as the system reduces its reliance on baseload nuclear and coal generation. If properly managed this transition could be done with minimal or in some cases positive impact on electricity prices and job creation,” he adds.
Future of solar power in SA
“I believe that solar power is critical for a just energy transition in South Africa and that the country should do everything in its power to tap into this vast natural resource to stay competitive and stimulate local industries and job creation,” comments Oosthuizen.
“As the world is moving away from carbon-intensive energy sources we should be tapping into our competitive advantage as a country and be an innovative leader in this transition.”