CHRIS ANTONOPOULOS: There’s a green light at the end of the tunnel
27 July 2022 - 15:29
byChris Antonopoulos
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The recent EU-AU summit in Brussels focused on the launch of the ambitious €150bn (R2.5-trillion) Africa-Europe Investment Package. The funding is earmarked for accelerating Africa’s transition to green energy as well as digitalisation. It could help deliver immense socioeconomic development for the continent.
Africa is already better positioned than ever to achieve its potential: the African Continental Free-Trade Area (AfCFTA) has been ratified by almost 40 AU member states less than a year after inception. AfCFTA is part of the AU’s Agenda 2063, which focuses on industrialisation and integration of regional markets through faster and easier trade networks. It is already the world’s second-biggest trade agreement after the World Trade Organisation.
Just how great is the potential? Consider that doubling intra-African trade would still produce a level of trade below that of intracontinental trade elsewhere in the world. With a 3% share in international trade, Africa’s potential for growth is vast. The UN Economic Commission for Africa’s forecasts indicate that just 18% of Africa’s overall GDP is from intra-African trade. That compares poorly with the 68% of trade that takes place within the EU, and the 58% within the Association of Southeast Asian Nations.
It is also important in the context of the economic consequences of the Ukraine war and the Covid-19 pandemic: many African states lack the muscle to launch fiscal stimulus for recovery as other states in other regions have done. Renewable energy can play a powerful role in that. The International Renewable Energy Agency forecasts that with the right policies, regulation, governance and access to financial markets, access to electricity in sub-Saharan Africa could rise from 48% to 67% by 2030.
As South Africans endure another winter of load-shedding they will be as aware as anyone on the continent of the importance of energy security. It’s already accepted that sustainable and affordable energy is crucial to SA’s economic recovery and development. But what’s emerging lately is the extent of that potential, something underscored when Eskom introduced level 6 scheduled blackouts for the first time since 2019. It’s also highlighted by reports that half of the generating units at 14 of Eskom’s coal-burning power stations break down again within nine months of being repaired.
The Global Wind Energy Council’s recent report, “Capturing Green Recovery Opportunities from Wind Power in Developing Economies”, found SA’s shift from coal-fired to clean energy — specifically wind — could deliver an additional 250,000 jobs and more than R150bn in gross value-add to the economy over 25 years. That’s if the switch to renewables is pursued with vigour with a shift in public policy over the next five years.
SA already has the commitment of $8.5bn in financing its just energy transition, agreed at COP26. Apart from helping address the power crisis and poverty, inequality and unemployment, that shift would yield huge decreases in carbon emissions: SA contributes about 5% to the global total of greenhouse emissions.
The shift to green energy would also save more than 50-million litres of water a year. As Gqeberha’s residents grapple with Day Zero and taps and reservoirs run dry, that benefit must surely not be ignored. In terms of cost, in the Renewable Energy Independent Power Producer Procurement Programme bid window 5 one wind project was priced at just 34c/kWh, compared to coal-fired power at about R1.32/kWh.
Local industry already stands to benefit from the manufacture of wind and solar facilities due to government regulations on local content. About 3,600 wind turbines and 14-million solar panels will be needed to meet the IRP2019 plans by 2030. By that time the large-scale renewable energy market is forecast to enable investment of R418bn.
SA’s infrastructure sector could further benefit from the global supply chain crisis, made worse by Russia’s invasion of Ukraine. Simply put, local suppliers’ proximity to new renewables projects gives them a real advantage over their overseas counterparts.
One matter that demands urgent attention — and this applies to the transmission of energy from all sources, not just wind — is the Eskom grid. GreenCape’s latest Large Scale Renewable Energy Market in SA report reveals that the grid’s capacity in the Northern and Western Cape is respectively at full capacity and at saturation point. Grid capacity will be a major factor in areas where new renewable energy projects are sited. Eskom confirms that the matter is receiving attention.
President Cyril Ramaphosa’s plan to address SA’s energy crisis includes steps to speed up procurement of renewables. So while generators rumble and beleaguered South Africans warily check apps and news bulletins for updates of when the lights will go off, there’s a green light at the end of the tunnel. It just needs to be turned all the way up.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
CHRIS ANTONOPOULOS: There’s a green light at the end of the tunnel
The recent EU-AU summit in Brussels focused on the launch of the ambitious €150bn (R2.5-trillion) Africa-Europe Investment Package. The funding is earmarked for accelerating Africa’s transition to green energy as well as digitalisation. It could help deliver immense socioeconomic development for the continent.
Africa is already better positioned than ever to achieve its potential: the African Continental Free-Trade Area (AfCFTA) has been ratified by almost 40 AU member states less than a year after inception. AfCFTA is part of the AU’s Agenda 2063, which focuses on industrialisation and integration of regional markets through faster and easier trade networks. It is already the world’s second-biggest trade agreement after the World Trade Organisation.
Just how great is the potential? Consider that doubling intra-African trade would still produce a level of trade below that of intracontinental trade elsewhere in the world. With a 3% share in international trade, Africa’s potential for growth is vast. The UN Economic Commission for Africa’s forecasts indicate that just 18% of Africa’s overall GDP is from intra-African trade. That compares poorly with the 68% of trade that takes place within the EU, and the 58% within the Association of Southeast Asian Nations.
It is also important in the context of the economic consequences of the Ukraine war and the Covid-19 pandemic: many African states lack the muscle to launch fiscal stimulus for recovery as other states in other regions have done. Renewable energy can play a powerful role in that. The International Renewable Energy Agency forecasts that with the right policies, regulation, governance and access to financial markets, access to electricity in sub-Saharan Africa could rise from 48% to 67% by 2030.
As South Africans endure another winter of load-shedding they will be as aware as anyone on the continent of the importance of energy security. It’s already accepted that sustainable and affordable energy is crucial to SA’s economic recovery and development. But what’s emerging lately is the extent of that potential, something underscored when Eskom introduced level 6 scheduled blackouts for the first time since 2019. It’s also highlighted by reports that half of the generating units at 14 of Eskom’s coal-burning power stations break down again within nine months of being repaired.
The Global Wind Energy Council’s recent report, “Capturing Green Recovery Opportunities from Wind Power in Developing Economies”, found SA’s shift from coal-fired to clean energy — specifically wind — could deliver an additional 250,000 jobs and more than R150bn in gross value-add to the economy over 25 years. That’s if the switch to renewables is pursued with vigour with a shift in public policy over the next five years.
SA already has the commitment of $8.5bn in financing its just energy transition, agreed at COP26. Apart from helping address the power crisis and poverty, inequality and unemployment, that shift would yield huge decreases in carbon emissions: SA contributes about 5% to the global total of greenhouse emissions.
The shift to green energy would also save more than 50-million litres of water a year. As Gqeberha’s residents grapple with Day Zero and taps and reservoirs run dry, that benefit must surely not be ignored. In terms of cost, in the Renewable Energy Independent Power Producer Procurement Programme bid window 5 one wind project was priced at just 34c/kWh, compared to coal-fired power at about R1.32/kWh.
Local industry already stands to benefit from the manufacture of wind and solar facilities due to government regulations on local content. About 3,600 wind turbines and 14-million solar panels will be needed to meet the IRP2019 plans by 2030. By that time the large-scale renewable energy market is forecast to enable investment of R418bn.
SA’s infrastructure sector could further benefit from the global supply chain crisis, made worse by Russia’s invasion of Ukraine. Simply put, local suppliers’ proximity to new renewables projects gives them a real advantage over their overseas counterparts.
One matter that demands urgent attention — and this applies to the transmission of energy from all sources, not just wind — is the Eskom grid. GreenCape’s latest Large Scale Renewable Energy Market in SA report reveals that the grid’s capacity in the Northern and Western Cape is respectively at full capacity and at saturation point. Grid capacity will be a major factor in areas where new renewable energy projects are sited. Eskom confirms that the matter is receiving attention.
President Cyril Ramaphosa’s plan to address SA’s energy crisis includes steps to speed up procurement of renewables. So while generators rumble and beleaguered South Africans warily check apps and news bulletins for updates of when the lights will go off, there’s a green light at the end of the tunnel. It just needs to be turned all the way up.
• Antonopoulos is CEO of Lekela Power.
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