RENEWABLE ENERGY: It’s no longer so expensive
Many factors have combined to cut the costs, writes Pedro van Gaalen
SA’s competitive tender-based Renewable Energy Independent Power Producer Procurement Programme is considered one of the most innovative globally. Since 2011, the programme has stimulated significant investment from independent power producers (IPPs). Tariffs have fallen sharply over the tender bidding rounds, to the point where round-four projects are among the lowest-priced grid-connected renewable energy (RE) projects in the world. Numerous factors have driven down these costs. "The hardware has become cheaper and more efficient. For example, solar photovoltaic (PV) panels are now up to 20%-30% cheaper," says Daniel Zinman, senior transactor: infrastructure finance at RMB. "IPPs can also deliver up to 50% more output for the same relative cost of round-one projects." Additional factors include increased local expertise, reliable grid integration and, importantly, the cost of capital and the innovative models used to finance projects. The net effect is that solar PV and wind energ...
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