The 15th of June was Global Wind Day and South Africa’s wind industry took advantage of the occasion to take stock of the country’s wind energy development programme. It says its wind farms will bring developments worth more than R5 billion in monetary terms to neighbouring communities.
Collectively, wind farms presently built or in the pipeline will invest over R5 billion of their revenue into socio-economic and enterprise development over the next 20 years. Shareholding of between 5% and 40% in the project companies is allocated to local residents on top of that. This investment is accompanied by the creation of employment opportunities for workers across the skills spectrum.
South African Wind Energy Association (Sawea) says that the wind industry in the country is committed to getting the delivery of community benefits right. Work undertaken by researchers has investigated the commitments to communities made by wind farm developers and their implementation so far.
Dipolelo Elford, chair of Sawea says, “South Africa has every reason to be proud of its burgeoning wind industry. Not only has it embraced a procurement system which has ensured highly competitive energy prices, but by designing into the procurement process mandatory financial contributions to local communities, the government has ensured that wind farms will not only ease the strain on our electricity supply, but will make real, tangible improvements to the future of nearby communities. Global Wind Day is described as a day for discovering wind, its power and the possibilities it holds to change our world – there is no better time to highlight our ongoing efforts towards bettering communities.”
The design of the procurement system in South Africa ensures that each utility-scale wind farm invests a percentage of its revenue towards socio-economic development (and in some cases enterprise development) in the areas surrounding the farm. Additionally, shares in the wind farm project company are allocated to an entity representing local residents within a 50 km radius. The revenue percentage and dividends from the shares in the farm will benefit the local economies and residents over the full lifetime of the wind farms: 20 years. Employment opportunities are created during all stages of the development, implementation and operation/maintenance of the wind farms.
Thanks to the government’s Renewable Energy Independent Power Producer’s Procurement Programme (REIPPPP), which has seen private investors competitively bidding to build wind farms, South Africa’s industry is booming. In 2011 there were just eight wind turbines in the entire country. Now there are five wind farms in full operation, 15 more under construction and a further seven about to reach financial close. Together these will provide 1,983 MW of wind power to the national electricity grid. By the end of 2014 around 400 wind turbines for these farms will be in place.
The financial benefits for communities will increase as a further allocation for wind farms has been granted by the department of energy and wind energy development is expected to continue to rise steeply until 2030 and beyond. Due to the competitive nature of the REIPPPP bidding rounds, the price of wind energy has decreased by 42%: in the last REIPPPP round (3) it averaged 74 cents per kilowatt hour (kWh) – 30% cheaper than the predicted cost of new coal power at Medupi power station.