Costing a 2020 target for 15% renewable electricity in South Africa

“Reaching a 15% renewable target by 2020 will not cost the earth…”

This is one of the key findings in a recent study by Dr Andrew Marquard, Bruno Merven and Emily Tyler from the Energy Research Centre, University of Cape Town.

Commissioned by the Climate Change Programme of WWF South Africa, the study explores the implications of a renewable energy target for South Africa to generate 15% of electricity from renewable resources by 2020. The report highlights the effects of 15% renewable electricity on the total cost of electricity production, investment in electricity infrastructure, and national greenhouse gas emissions.

Marthinus business as usual quote

The study assumed that delivery of the target (15%) will begin in 2015, when the first renewable plants will come on-line and produce 2.5% of South Africa’s electricity, which will increase linearly until reaching 15% in 2020. A number of scenarios were modelled to explore various ways in which the target of 15% could be met. These scenarios were

  • Case 1: Wind power modelling using the same assumptions as the Long Term Mitigation Scenarios (LTMS) on South Africa’s wind resource.
  • Case 2: Wind power modelling using new and more optimistic research on SA’s wind resource.
  • Case 3: Model constrained to use an equal amount of wind and Concentrating Solar Power (CPS) using the more optimistic wind resource assumptions.
  • Case 1A, 2A, 3A: same as above, but in conjunction with a demand-side (consumer use) efficiency programme.

Table 2 new generation capacity

In Table 2 above, the model, in the reference case (the baseline), shows additional capacity of of just over 12GW required up to 2020. Wind options require more installed capacity to ensure the same availability. In the scenarios with an energy efficiency programme, between 57% and 94% of coal capacity is displaced.

Costs for study have been calculated using two approaches. Firstly, by using the method employed in the LTMS to estimate the cost of mitigation, and secondly by using the model output to calculate direct costs in the electricity sector from the input costs. The three cost measures that were used are: 1. Investment costs, 2. Total undiscounted annual electricity production costs, and 3. Average annual electricity production costs per kilo Watt hour.

Table 8 power sector investment requirements

Table 8 above: * All costs are expressed in 2003 Rands. Costs can be converted to 2008 Rands by multiplying the relevant PPI ratio (in this case, about 180/124, where 180 is an estimate of the PPI for 2008).

The study concludes that a renewable energy target of 15% for 2020 comprising wind and solar thermal energy, particularly combined with energy efficiency programmes, will provide significant greenhouse gas mitigation, together with air quality, health and eco-system service co-benefits to South Africa.

There are also opportunities for the South Africa to develop a competitive advantage in solar thermal technologies, and establish South Africa industry and technicians as front-runners in this area of the rapidly expanding renewable energy sector!

This study is long overdue, and makes a strong case for renewables, especially with the potential direct employment benefits and job creation opportunities that renewable energy generation and technologies could provide (as per a study conducted by AGAMA Energy in 2005).

Well done to the research team! To read the full study overview, visit WWF – South Africa, or download a copy here.

Richard Worthington WWF

Cut Carbon. Dare to change!

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