Renewable energy is still too expensive — and we might not need it
When renewable energy was first supplied to the grid, it was a valuable addition as Eskom was short of capacity, today there is surplus of power, writes Philip Lloyd
In his state of the nation address, President Jacob Zuma announced: "Eskom will sign the outstanding power purchase agreements for renewable energy in line with the procured rounds." The renewable energy producers cheered, but many others questioned how and when this would come about. Eskom’s failure to sign is because they are paying too much for the renewable energy. They have to increase the price at which they sell power to pay for the costly renewables, but the National Energy Regulator of SA is reluctant to grant any further increases. How has this impasse come about? The Department of Energy’s renewable energy independent power producers (IPP) procurement programme has, rightly, been hailed an outstanding success. In five rounds of bidding it has attracted some 6,300MW of capacity, with an investment of about R200bn — and the cost of renewable energy has dropped with each round. Wind power was R1.36/kWh in the first round; in the fifth it was R0.68 (in April 2014 rand). Photo...
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