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Development of Africa’s broader renewable-energy value chain holds great potential
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Development of Africa’s broader renewable-energy v...

Africa’s broader energy-production value chain holds enormous potential to deliver better solutions for the end user and reduce the country’s carbon footprint. While this development is still in a nascent phase, a number of innovations will drive activity this year and into the future, creating business and job opportunities.


According Head of Natural Resources for Commercial Banking at Standard Bank, Berrie de Jager, South Africa has some of the best renewable resources in the world, with recent programmes increasing supply and reducing prices. But benefits still need to be maximised across the broader supply chain. While investment is taking place, it’s not happening fast enough.


One reason for this is a lack of a clear regulatory framework. However, the publication of NERSA’s paper on small-scale embedded generation could serve as growth catalyst, and the Renewable Energy Independent Power Producer Procurement programme (which reduced bid prices for solar and wind projects, and established an ecosystem of players who supply and manage these solutions) is back on track after it stalled shortly.


Another key driver is Government’s ratification of the Paris Agreement on climate change. Not only will this ensure that climate-change effects are addressed, but it also sets the scene for accelerated growth in the energy efficiency and clean-energy generation sectors. Already, more players want to become less dependent on Eskom, with more co-generation expected in the future as those with surplus capacity sell into the grid.
Outside of funding energy-generation projects, major opportunities for financing and manufacturing are emerging: component distributors and companies specialising in renewable solutions are gaining traction. Others are expected to create a manufacturing footprint, rather than sourcing from abroad.


According to CSIR Energy Centre Analysis, the REIPPP Programme has been well run, but demand is too “spiky” to trigger significant investments into local production. Yet, companies are beginning to fill the gaps: entrepreneurs are building biogas plants that produce power through the fermentation of organic matter. They can then use the power for self-consumption, sell it to another company, or supply their excess energy to the grid.


The longer-term game for Africa is about developing a hybrid of energy solutions that can create efficiencies and scale. The coming carbon tax in South Africa should create business opportunities for players to co-ordinate such activities. Just the monitoring and registration of these projects will create economic activity, while the carbon-trade market will also pick up.
Value interlinks will develop across the continent (areas with solar PV, wind and hydro power), supplying other regions and resulting in further research and new solutions. This will create opportunities for engineers and sellers of energy solutions to enable these developments.


“Skills transfer will improve across this industry as all these developments begin to take shape,” says de Jager. “It will permeate the economy and trigger demand, and as a responsible bank with our roots in Africa, we will assist in driving this growth.”

 

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