On Thursday, the Oxford Business Group, a publishing, research and consultancy firm, released an economic update on the state of South Africa’s renewable energy sector, saying that the country is already the continent’s largest producer of renewable energy.

With an increase in independent power producers (IPPs), especially within the renewables market, the country has pulled in an estimated ZAR194 billion ($12.3 billion) since 2011, the business group said in a statement.

According to energy minister, Tina Joemat-Pettersson, this figure is expected to increase during this year.

Renewable power sets firm roots in SA

Quoting the minister’s budget speech in May, the business group explained that under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), launched in 2011, the contribution of IPPs to generation is expected to reach approximately 7GW by mid-2016.

A further 1.8GW of new renewable projects are currently being evaluated, with a decision on tenders to be announced later this year.

Given the scope and scale of new projects coming on-line, South Africa appears to be on course to achieve its renewable target of 17.8GW by 2030, the minister added.

Diversifying the energy mix

The government aims to reduce the share of fossil fuels in the energy mix from 86.5% in 2010 to 57% by 2030, with renewables set to fill 21% of the generation gap and a $100 billion nuclear energy programme to make up the balance, the research firm said.

“Currently, renewable power sources account for 5% of South Africa’s installed capacity, from a baseline of zero in 2010. This has led South Africa to become the largest wind energy producer on the continent and to be placed among the top-10 countries globally for installed, utility-scale solar photovoltaic capacity,” the firm explained.

IPPs have produced around 1,379kWh in March 2016, a 29.7% increase from mid-July 2007. This is equivalent to around 7.2% of Eskom’s output.

Biofuels to gain traction

According to estimates by the Ministry of Energy, the production of 460 million litres of biofuels, as approved by Cabinet in 2007, can create 15,000 new permanent direct jobs in the biofuels manufacturing plants and agriculture; plus over 3,000 temporary jobs during the 24 months of construction. A 460 million litres per annum biofuels industry can immediately improve the country’s annual balance of payments by over R2.5 billion ($158 million) at the current crude oil prices and exchange rate.

The economic report highlight: “While biogas projects currently face difficulties in attracting funding and do not yet have a feed-in tariff system in place, the Biofuels Regulatory Framework, due to be submitted to Cabinet this year, may put the segment on a more sound footing and boost investment opportunities.”

Eddie Cooke, vice-president of the South African Biogas Industry Association, told a seminar on bioenergy earlier this month: “There are many opportunities surrounding the treatment of biowaste in South Africa, including the construction of waste treatment facilities in rural areas, which would have the added benefit of providing an alternative energy source in remote areas where there is no electricity infrastructure.”

According to David Mahuma, senior manager of energy at the South African National Energy Development Institute, with much of the industrial base needed to produce equipment for waste processing already in place, the development of biogas technology would require only minimal re-gearing by manufacturers.