Dion Govender, Chief Executive, Siemens Energy

10 March 2010 - Siemens Energy Southern Africa, a supplier to Eskom's coal-fired plants and pumped storage schemes, aimed to expand its renewable energy unit into its biggest division, chief executive Dion Govender said this week.

Govender said Siemens Energy was currently involved in the development of about 16 renewable energy projects in South Africa.

"We come in to provide technical support to consortiums trying to develop renewable energy projects," he said. "Later we could come in again as equipment suppliers."

Fifteen of the 16 projects were proposed wind farms. Govender would not disclose the identities of the wind farm developers owing to confidentiality agreements. The other project was a 50 megawatt concentrating solar power (CSP) facility in the Northern Cape, proposed by Israeli solar energy company Solel.

Siemens purchased Solel last year for $418 million (R3 billion), as part of a strategy to become the market leader in the solar thermal sector.

The group's preferred CSP technology is a parabolic trough design using molten salt and oil for storage.  Siemens' CSP manufacturing facilities are located in Israel, but Govender said it was eyeing a broader manufacturing footprint.

"There is the technical skill and capability to manufacture components for both CSP and wind in South Africa," he said.

"Just about everything could be manufactured locally but it all depends on economies of scale."

Govender believed that South Africa's on-grid renewable energy sector would be dominated by wind and CSP over the next two to three decades.

It was imperative that South Africa proceeded quickly to bring on board projects that would help it meet a 2013 target of securing about 4 percent of the country's projected electricity demand from renewable sources, he said.

"We have to get going on the first projects. Success will breed success. If we can demonstrate that a wind farm in South Africa can commercially compete, be reliable and contribute to national diversity and security of supply, then other projects will follow suit much faster. We've seen it happen in Europe," he said.

The feed-in tariffs tabled by the energy regulator last year, the publication of the rules governing the selection criteria for renewable energy projects last month, and the pending establishment of an independent systems operator would be key drivers of the local renewable energy market, Govender said.