Renewable energy has been around for a while. But as attractive as the concept might have been, the hard reality was always that it just did not make economic sense. I remember not so many years ago doing the sums for a solar powered geyser for my house, and discovering that it would take 15 years to get a return on my investment. This is all changing − fast. Solar and wind power are quickly becoming cheaper than fossil fuel and nuclear. Renewables could soon account for the bulk of global electricity production, far beyond today’s 26 percent share.
Not only do renewables need far less investment than building new coal or nuclear power plants, but the time frame is way shorter. This is before even thinking about the savings in damage to the environment due to a reduction in carbon emissions, not to mention the vast amounts of water needed to generate coal, gas and nuclear power.
The rate at which prices have fallen has surprised even the experts. Numerous reports show that building new renewable energy capacity is now comparable with the cost of coal and nuclear. Existing, older power plants already have the capital investment sunk, so they are cheaper, but in the case of South Africa, many of these plants are reaching retirement age. A UCT report, part of a global study on coal transition strategies, says that new renewable energy capacity is now considerably cheaper than coal-fired power plants like Medupi and Kusile.
A recent report by the International Renewable Energy Agency says that over half of the renewable capacity added in 2019 worldwide had lower power costs than the cheapest new coal plants. A new analysis released by Lazard compares the levelised cost of energy for various technologies on a $/MWh basis and shows that utility-scale solar and wind are frontrunners against coal and nuclear. In a world first, the state of South Australia was recently completely powered by solar energy, with 77% of the energy coming from rooftop solar systems; and Elon Musk’s next killer product looks set to be solar roof tiles that cover your whole roof. He believes the world could be powered completely by solar energy by harnessing the sun’s four million tons of energy produced every second.
“It’s not if the disruption of energy will happen, it’s when,” says a report from RethinkX, an independent think tank that analyses and forecasts the speed and scale of technology-driven disruption and its implications for society. It adds that by 2030 electricity systems comprised entirely of solar, wind and batteries will be able to provide the cheapest power and three times more total energy than the existing grid in the United States, bankrupting coal, gas and nuclear power companies and slashing consumer costs.
In South Africa renewables make sense. We have abundant solar and wind resources and a well developed grid. Currently 8% of our power comes from renewables and 88% from coal. But many of our ageing coal powered power stations will be decommissioned by 2040, and we will be building new capacity. We have a chance to leverage this huge opportunity. The Integrated Resource Plan supports a diverse energy mix and says that South Africa will keep using coal as its main power source, but will change the energy mix to 59% coal and 27% renewables by 2030. This will reduce carbon emissions, save scarce water, attract investment in energy, and create much needed jobs – resulting in a hugely positive impact on the economy. “This represents a huge, fundamental step forward in the implementation of our ambitious energy plan,” says Cyril Ramaphosa. “New generation projects that can be connected to the grid quickly will be prioritised. The next step is to initiate various procurement bidding windows in the independent power producer programme.”
It looks like we are at a tipping point in the coal transition − it’s already happening. Anyone taking a drive down the N2 past Port Elizabeth will see waves of wind turbines on the horizon; and if you look down on Sandton from the top of one of its beautiful buildings, it’s quite an eye opener to see all the solar panels and realise how many head offices are already off the grid; or if you’re driving past Upington on the N14, take a look at some of the massive new solar farms stretching as far as the eye can see; meanwhile Johannesburg and Cape Town are preparing to source their own solar power from large independent power producers.
I don’t know about you, but I’m quite excited that green electricity is round the corner at last.
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