3 October 2013 – Renewables offer potential in terms of local economic growth in South Africa according to juwi-expert Zirk Botha who participated in a panel discussion concerning community upliftment at Windaba held in Cape Town during September 2013.
While the price for fossil-fuel derived electricity will increase even further, due to high demand and shrinking natural resources, the price for green electricity from wind and solar farms has continuously decreased in the recent past, making renewables a serious competitor for market share. Wind power has already reached the so-called grid parity in South Africa. This means that electricity from wind and coal will be fed into the public grid at the same cost. In the near future, renewables, especially wind power, is poised to replace fossil fuels completely as the costs for wind turbines and solar panels will continue to decrease.
Furthermore, the wind and sun does not issue invoices. Their energy is for free. Besides these advantages over fossil fuels, the expansion of renewable energy also has a social dimension. “The decentralised expansion of a power supply based on renewables also strongly contributes to rural development and offers enormous potential in terms of local economic growth and community upliftment,” Botha, who is economic development manager at juwi Renewable Energies, explains. “Unlike conventional power producers, any renewable independent power producer (IPP) wanting to participate under the REIPPP must ensure 2.5 – 5.0 per cent of ownership to local communities.”
Further, 1.0 – 1.5 per cent of gross revenue must be spent on community upliftment, predominantly within a 50 kilometre radius around the project site. “As an example”, Botha says, “a community trust of a large wind farm project might earn dividends of more than R20 million annually. A further 0.6% of turnover must be spent on enterprise development. Not to mention the skill transfer that happens during the construction as well as operational phase. All this is already included in the price of ZA89c/kWh for wind energy.”