Programme director
President of the African Wind Energy Association President, Mr Herman Oeslner
Board members of the African Wind Energy Association
Professor Wolfgang Diehl, Fraunhofer Institution, Germany
Ladies and gentleman
Thank you for the invitation to address this important gathering.
I trust your deliberations over the past two days have been fruitful and will contribute to accelerating the deployment of wind power technology throughout the continent.
South Africa is committed to the transformation of our electricity supply system, which offers opportunities for green growth, increased job creation and the most efficient use of natural resources. We are also committed to improving regional cooperation, including realising the benefits of increasing grid integration, and the "smart grid" innovations that seek to manage demand as well as supply.
Given the interconnected nature of the global energy challenge and its effect on national development goals throughout Africa, it is absolutely crucial that we promote the level of collaboration epitomised by this third Wind Power Africa Conference - nationally, within our region, and across the globe. Given the linkages among the goals of universal access to energy services, eradicating poverty and ensuring food security, in the context of accelerating climate change and variability and the depletion of natural resources, we are embracing the challenge to scale up the use of renewable energy rapidly.
Wind energy has the potential to make a significant contribution to energy security in South Africa and the continent. The South African Government is pleased with the active research, development, innovation and support roles that our country's academic and research institutions, science councils, industry and associations are playing in this regard. But we cannot afford to be complacent. We need to scale up all our endeavours to fully realise the public and localised benefits, including opportunities for broad-based participation in the economy, available through the wind energy industry.
Wind constitutes a vast indigenous source of clean energy across Africa. However, there are challenges facing the wind energy industry. These include the intermittent nature of wind at any particular location, integration into the electricity grid, the uncertainty of future government "subsidies" or interventions to level the energy playing-field, and the front-loading of costs or capital-intensive investment requirements. This conference strengthens my conviction that, while these challenges are real, they are not insurmountable.
I am particularly encouraged by the South African Wind Energy Programme (hosted by the Department of Energy) and the South African Renewables Initiative, SARi, an interdepartmental strategy led by the Departments of Trade and Industry and Public Enterprises, which is being established to address the challenges of financing at a scale sufficient to develop local industries in renewable energy technologies. SARi is working on the design of a financing mechanism using available investment vehicles, which could also draw on innovative climate funding. For too long public spending on electricity supply infrastructure has largely by-passed renewable energy technologies. Allocations and subsidies relative to fossil fuel and nuclear spending have been negligible. We are committed to changing this
The Department of Science and Technology's Ten-Year Innovation Plan identifies energy security as one of five priority areas. Our vision is a globally competitive South African energy industry that will help ensure universal access to modern energy services for all South Africans and in turn support sustainable economic growth and protection of the environment.
Through Stellenbosch University's Centre for Renewable and Sustainable Energy Studies, which serves as a hub for the South African National Energy Research Institute, the department supports the wind energy spoke, which was awarded jointly to the Stellenbosch University and the University of Cape Town. The spoke focuses on small and medium-scale wind energy conversion systems, power electronic converters, fault diagnosis, network integration, wind resource assessments and load modelling.
In future, the spoke could focus on improvements in technology in response to lower wind-speed areas and complex terrains, such as custom-designed permanent-magnet generators, variable-speed electronic power converters with improved performance characteristics and reliability, and unique gearbox designs that are smaller and lighter. It is imperative that, in an area of such potential, we dedicate sufficient efforts and resources for research in the area of wind power, with a strategic focus on optimal plant designs, cost effectiveness and progressive improvements.
Investment in wind energy and the successful deployment of wind technology will be greatly enhanced by the South African Wind Atlas Initiative, which provides accurate data in terms of the practical exploitable wind energy potential. The first phase of the initiative (in the Northern, Western and Eastern Cape) is progressing well. While the 7 MW Darling wind farm is currently the only commercial-scale wind farm project, there are many more under development.
According to the 2010 Global Wind Report by the Global Wind Energy Council, global installed wind power capacity increased by 24,1% during the year, and currently stands at 197 GW – more than the entire electricity generation capacity in Africa. North Africa has led the continent in wind power, with the vast majority of installed capacity in Egypt, Morocco and Tunisia, and with Algeria rapidly catching up. Closer to home, Kenya may well overtake South African deployment in the short term. However, the South African Wind Energy Association estimates that, with the right policy framework, wind energy could provide 20% of the country’s electricity generation by 2025 - about 30 000 MW of installed wind capacity.
South Africa is approaching a fairly rare window of opportunity in the electricity supply industry, in particular because the majority of coal-fired plants in our existing fleet are due for retirement in the decade from 2023. This opportunity is of regional significance as the Southern African Power Pool develops. This allows time for both developing local wind power industries and evolving to "smart grid" transmission and distribution systems, designed for optimal matching of demand with resource-efficient supply and the integration of intermittent resources over a broad geographical area.
Among renewable energy technologies, wind power is relatively mature. In some markets it is already cost-competitive with coal-fired power, and the speed of deployment is second only to photovoltaic panels. China and India have rapidly come to compete with the likes of Denmark, Germany, Spain and the United States of America (USA), leaving Africa with some serious catching up to do. Fortunately, there are growing opportunities for international collaboration, not least under the technology mechanism being established under the United Nations (UN) Framework Convention on Climate Change, as well as initiatives to mobilise innovative sources of finance.
(I trust some of you will be back in South Africa when we host the 17th Conference of the Parties in Durban towards the end of this year, to help us mature these work programmes.)
Access to affordable energy services is a leading priority for Africa and for a majority of South Africans. From a medium to long-term perspective, it is clear that the optimal use of wind resources for power supply will be helpful in containing electricity price volatility and escalation. We need to further develop our understanding and quantification of the portfolio risk management benefits of increasing the share of renewable resources in energy supply. Short-term avoidance of capital costs is likely to impose a far greater affordability challenge over time. Conversely, further lock-in to stock energy – the concentrated energy in conventional fuels such as fossil and nuclear – reduces opportunities to invest in local use of renewable resources.
It is, of course, not only through input into the grid-based portfolio, but also in the localisation of energy service supply, that wind power offers real development and empowerment benefits. For most people in Africa, it is the energy services – lighting, communications, mobility, heat, etc. – that are of primary interest, rather than the resource from which they are derived. The extent to which renewable energy industries evolve to meet energy service needs with locally available resources and the participation of communities is crucial to a full appreciation of the merits of the technology and market offerings.
Internationally, it is the climate-change imperative that provides the strongest driver for the transition to a low-carbon economy. The science so painstakingly compiled by the Intergovernmental Panel Climate Change (IPCC) – the Intergovernmental Panel on Climate Change established by the UN nearly 25 years ago – tells us that humanity should become "carbon neutral" before the end of this century. It would be nothing short of catastrophic to continue adding to the atmospheric accumulation of greenhouse gases. A major new report by the UN’s Intergovernmental Panel on Climate Change released yesterday, projects that close to 80% of the world energy supply could be met by renewables by mid-century if backed by the right enabling public policies.
South Africa is playing a leading role in efforts to entrench a multilateral response to climate change. Our mitigation commitments have been formalised in the Cancun Agreements to the United Nations Framework Convention on Climate Change (UNFCCC) last year – for reduction against business as usual by 34% by 2020 and 42% by 2025. Such objectives require not only support for and innovation in finance and technology, but also greater transparency and accountability on the part of all stakeholders. MRV is a recent addition to the UNFCCC lexicon – the requirement that national efforts are measurable, reportable and verifiable.
South Africa is also an innovator in this sphere, with the King III provisions for integrated triple bottom line accounting, required for participation on the Johannesburg Stock Exchange, with stipulations for quantified and inclusive assessment of social and environmental costs and benefits. It would make a lot of sense for companies that should by nature perform well under such assessment to be at the leading edge of implementing such initiatives.
We have heard the dismay of wind power companies, and others, regarding the National Energy Regulator (NERSA) publication of a consultation paper regarding revision of the feed-in tariffs that were approved in 2009. Some concern is certainly understandable, given the delays in finalising an initial round of power purchase agreements, relative to the timeline NERSA anticipated at the time of approval. However, while of course I cannot speak for the regulator, NERSA has a statutory duty to undertake such a review to facilitate the entry of independent power producers.
I have no doubt that these concerns will be given due consideration, in light of government’s commitment to the diversification of the energy supply and our green economy initiatives, particularly where they offer strong prospects of offering South Africans job opportunities. The reductions in costs of electricity generation from wind are a cause for celebration. They must be taken into account in all aspects of electricity supply, industry, governance and planning, alongside risk management issues faced by all the parties involved in using our bountiful renewable resources. Risk management includes an imperative for market signals, to level the playing field for long-marginalised renewables, that are (to borrow a catchphrase from policy advocates) long, loud and legal.
We have heard from many industry players that offering over-generous tariffs could be detrimental to the long-term and large-scale prospects for wind power, attracting opportunistic or inexperienced players whose performance could be grist for the mill of the ever-present sceptics. It is not that long ago that our parliament was told, by a so-called "independent expert", that wind power was an indulgence, making a negligible contribution to reliable electricity supply. The Department of Science and Technology, informed by research and evidence, certainly does not share this view. Our task is to ensure that good research is done, and that this leads amongst other things to a proper appreciation of the merits and potential of wind power. We are also working for a better understanding of an optimal balance between stimulating local renewable energy technology industries and employment, and realising positive learning curves.
Allow me to conclude by expressing our appreciation to the Association and all of you for you dedication and efforts to chart the way forward in this exciting area of clean and renewable energy. Tomorrow you will still be discussing important issues like storage of electricity generated from wind and the challenges of grid connection.
I hope that you will enjoy your stay in the Cape, with its well-known hospitality and distinct mix of cultures, world-famous biodiversity and numerous heritage sites. Don’t miss the opportunity (if the weather allows) to go up Table Mountain by cable car, or even better, if you have enough energy, by foot. It is in the running to become one of the new seven wonders of the world.
Thank you.
