SAAEA Comments on the RSA RE Windows South African Alternative Energy Association To the Portfolio Committee on Energy By David Lipschitz, on behalf of.

SAAEA Comments on the RSA RE WindowsSouth African Alternative Energy Association

To the Portfolio Committee on Energy

By David Lipschitz, on behalf of SAAEA7th June 2012

Phone: 021 813 9895; 082 900 [email protected]; skype: MyPowerStation

(c) My Power Station Technology cc 2012Permission is given to copy parts of this presentation as long as the author is acknowledged 1

This PresentationNot much time, so focusing on PV

SAAEA would like to thank Governmentfor its implementation of the

2003 White Paper on Renewable Energy

“Government should create an enabling environment through the introduction of fiscal and financial support mechanisms within an appropriate

legal and regulatory framework, to allow renewable energy technologies to compete with fossil-based technologies.”

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Agenda• Pause and Reflect. Spaceship Earth.• Sunny Resources• The Fossilized Fuel Industry. How long do we have?• Electricity: an enabler; BRICS: sustainable growth• Citizens Electricity Challenges• Exponential Growth• Grid Parity• Financing Projects: Existing or New Money?• Observations re the Renewable Energy Procurement

Tender process

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P a u s e & R e f l e c t

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Global Energy Resources

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30 TWH in 2030

10 TWH in 1990

How long do we have?At 3% electricity consumption growth

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What’s electricity for anyway?• It’s like ICT, except ICT depends on Electricity

• It’s an enabler to get the country moving• Fast, cheap, reliable pathways from a to b will

get our economy going– Communications (Infrastructure)– Electricity, Population Growth, Resources• David Murrin: “Breaking the Code of History”

• Can the “Energy Internet” finally happen?– Thomas Friedman in “Hot, Flat and Crowded”

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BRICSBrazil, Russia, India, China, South Africa

• Page 69: NPC Report: “Brazil, China, India, Indonesia, South Korea and Russia will account for more than half of all global growth, growing by an average of 4.7% a year to 2025, by which time their share of global GDP will have grown from 36% to 45%.”

– My Comment: It is time for South Africa and Africa to shed its association with its colonial masters, England, France, Germany, Portugal, Spain, and the USA, which are part of the dying Western Empire, and change to a much closer association with the Asian Tigers, BRICS (China (9.5%)), Indonesia, South Korea, and of-course the African Tigers: Ghana (13.5%) (2nd highest), Mozambique (7.2%), Ethiopia (7.5%), Nigeria (6.9%), Botswana (6.2%), South Africa (3.4%). 36 African countries growing faster than the RSA.

– Qatar (18.7%), India (7.8%), Russia (4.3%), Brazil (2.8%), Germany (2.7%), USA (1.5%), UK (1.1%), Portugal (-2-2%), Greece (-6%)]

– Growth rates in % are net growth after inflation.(c) My Power Station Technology 2012 8

Electricity Challenges• For City Dwellers without electricity, NO:– Water, Banking, Petrol, Transport, Food, Life– Only 4 days of food in the supply chain

• Everything we do depends on electricity– We need security of supply– We need price certainty

• So, how do we:– Create security of supply? Quickly?– How do we start reducing prices? Quickly?

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Photovoltaic & Grid Tie Inverter Electricity= Electronic (ICT) Electricity = The Energy Internet

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Riverside Renewable Energy, Holt LogisticsGloucester Marine Terminal, New Jersey, USA

9MW Roof Top PV, $42m, ~ 110,000 square meters

Our EnvironmentPhotovoltaic (PV) Production

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Buying and Producing ElectricityGraph in Rand per kwh

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2008 2009 2010 2011 2012R0.00

R1.00

R2.00

R3.00

R4.00

R5.00

R6.00

R0.57R0.77

R0.95R1.14

R1.32

R5.56

R3.89

R2.00

R1.56R1.32

City of Cape Town - When do we get to "Grid Parity"?ie when can we make our own electricity cheaper than we can buy

it?For Homeowners using 1,200kwh or more. Plus some other assump-

tions.Green Line is production using Net Metering. The red line is buying.

kwh cost of buying kwh cost of manufacturing

Fix your price and save

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Existing or New Money?• New Large Scale Power Stations require– New Money

• New Small Scale Power Stations use– Existing Money

• Homeowner and SMME pays R1.32 per kWh for buying electricity and for producing it!

• Net Metering is an enabler– With a Wheeling (Reverse Feed) Tariff– Without a Service Fee• Buy electricity at R1.32 per kWh; Sell at R1.16 per kWh

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R2.3 trillion

R2,300,000,000,000• Repayments– At 10% over 20 years– R23,000,000,000 per month• R23 billion per month is what the people of South

Africa will be paying for their new electricity fleet if we follow the old 20th Century technology path

– 50 million people; 7 million taxpayers• R3,285 per taxpayer per month

– for capex repayments only

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Portfolio Committee on Energy

• We’ve shown the– Energy Public Meeting (EPM)– Possibilities re entry and prospects of growth of

Renewable Energy in SA from business perspective

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SAAEA Observations re Tenders

• Window 1 & Window 2– 1,450 MW available– 1,048 MW allocated for IPPs– 402 MW available for Under 1 MW systems?• Homeowners• SMME’s

Ref: http://www.ipp-renewables.co.za/index.php/press/detail/preferred-bidders-window-1http://www.ipp-renewables.co.za/index.php/press/detail/preferred-bidders-window-2http://www.evwind.es/noticias.php?id_not=18891

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Speed to Market (1)• Tender– Big Barriers to entry. Keep the locals out!– Slow

• Eskom overload. Taking Eskom’s planners’ eye “off the ball”

– Failed in the UK, which changed to FITs– Not everyone is awarded a contract– Not transparent. Why did some get it & others not?

• FIT Feed In Tariff– Fast– Same price for everyone. No favourites.

• Net Metering (402 MW available for Under 1 MW systems?)

– Fastest & Cheapest– Homeowners and SMME’s pay

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Speed to Market (2)• Financing Net Metering– No public finance required! No government debt!– Allow homeowners and SMME’s to buy ex VAT and

before tax– Banks should offer bonds at homeowner’s rate

less 1%, eg Prime – 3%. Bank collects the carbon credits.

– Eskom’s announcement on 5th June 2012 re paying R1.20 per kWh (plus VAT) for electricity removed from the grid at Standard Time (6am to 10pm) is welcome and a step in the right direction• but why is there a minimum 10 kW entry point?

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The Big Energy Myth• From Dr Hermann Scheer’s Book “The Solar

Economy” pp 169 to 170– “Once the fear of the small scale has been dispelled,

once RE has demonstrated that it can replace fossil energy in its entirety, then the aura of the centralised nuclear/fossil industry will quickly fade.

– Ordinary people are caught up in the myth of big technology … We need an active and engaged society”

– Trevor Manuel & the National Planning Commission calls for an active and engaged society

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Contacts• David Lipschitz, My Power Station– 021 813 9895; 082 900 5903– [email protected]

• Alwyn Smith, SAAEA– 071 637 8466– [email protected]

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