South Africa plans to expand use of renewable power as the coal-dependent nation expects traditional, centralized generation plants to “disappear,” Energy Minister Jeff Radebe said.
Renewable power from independent producers currently accounts for 3,776 megawatts, less than 5 percent of the energy sold to consumers, but the country’s expansion into cleaner power generation has already had a “significant” economic impact, Radebe told reporters in Pretoria. He said the most industrialized African nation has made various commitments to reducing climate change.
Under President Cyril Ramaphosa, who is leading a drive to attract $100 billion of investment, Radebe revived the national renewable-energy program that was once the world’s fastest growing, but had since stagnated. The minister signed agreements with 27 independent power producers, or IPPs, in April after more than two years of delays.
“Big centralized power generation plants will disappear and replaced by distributed generation, mini-grids and batteries,” Radebe said. Ramaphosa announced plans to split financially strapped state-owned utility Eskom Holdings SOC Ltd. into generation, distribution and transmission businesses under a state holding company in his Feb. 7 State of the Nation address.
Unions have resisted the IPPs because the labor groups anticipate job losses at Eskom as the independent producers are added to the grid. South Africa is dependent on the mining and burning of coal for more than three-quarters of its electricity generation. Job losses in the coal sector have no link to the expansion of renewable power, Radebe said.
Through a transition to cleaner power, South Africa should concentrate on finding ways to mitigate the consequences faced by coal miners and communities where the mines are located, he said.
Earlier rounds of the renewable IPP program were “relatively higher in pricing,” though the government has “no intention” to renegotiate the contracts and costs have come down in subsequent rounds, he said. The refinancing of some projects will be considered on a case-by-case basis.