The High Court case, in Pretoria on March 27, saw the full gamut of human emotions: anger; frustration and folly, followed by joy.
The latter emotion came from the long-suffering 27 independent power producers who won the case against an interdict to pave the way for the signing of the Power Purchase Agreements (PPAs) with the Department of Energy – the 20-year agreements that give them a chance to claw back $3.8 billion in investment.
The deal will add 2,300MW of green power to the estimated 40,000MW in installed capacity. Despite this, green power will make up 5% of South Africa’s power.
Outside the court, the thwarted National Union of Metalworkers of South Africa (Numsa) members and pressure group Transform SA weighed in with the anger and frustration coupled with a threat to block the streets in protest. As the union licked its wounds, the court poured on salt by ordering it to pay costs as it stuck the application from the roll.
“We got it from Eskom that if they introduce these renewables, they’ve done calculations on power station by power station on how many jobs will be lost. When we did this study last year it was found that 30,000 to 40,000 jobs are likely to be lost and there seems to be no interest about that,” says Numsa Secretary Irvin Jim.
“We are prepared to block the streets to achieve this.”
This claim despite the fact that Eskom will have to close down a number of its ageing and crumbling coal-fired power stations.
<a href="http://www.forbesafrica.com/technology/2017/10/30/road-green-future/" target="_blank" rel="noopener">READ MORE: On The Road To A Green Future</a>
“The South African population is being taken for a ride. Our fiscus is being looted because these companies, IPPs are only producing 5% power and taking 30% of Eskom’s profits,” says Transform SA’s Adil Chabeleng outside the court.
The mighty National Union of Mineworkers (NUM) – the biggest union in Africa with more than 300,000 members – agrees with Numsa that the unions don’t want private money generating the people’s electricity. They also feel that capitalists have benefited from public money ploughed into kick-starting green energy with preferential tariffs.
“We view this capitalist IPPs deal as a backdoor privatization of Eskom. The plan is to privatize 42% of Eskom by 2030 masquerading as the implementation of clean energy,” the NUM said in an angry statement.
“We are going to mobilize all our members and society to revolt against this planned madness called IPPs.”
Days after this fire and fury, Energy Minister Jeff Radebe shocked many by putting pen-to-paper for the PPAs to end the years of waiting.
The big problem now is to revive the dormant green power industry in South Africa.
“We have to resuscitate the industry to generate this power. Supply chains have to be rebuilt and manufacturing restarted. The whole supply chain has lain dormant for nearly three years,” says Brenda Martin, a board member of the South African Renewable Energy Council that represents most of the 27 IPPS.
Martin also refutes one of the claims of the unions that green power will see billions leaving South Africa and into the pockets of foreign investors. Numsa&#8217;s legal counsel Advocate Nazeer Cassim had argued in court that the signing of the IPPs could be viewed as a form of economic looting.
“Only 25% of this deal is owned by foreign investors and the rules of the game is that most of the money must stay in the country.”
Whatever the fall-out over the signing of the PPAs, just weeks before, this unsteady progress was a pipe dream after many months of dithering and a court case.
Picture this: multi-millionaire, suited and booted, investors leave air-conditioned airport lounges to fly thousands of miles to Africa to accept a government invitation to finally sign up for a return on their investment; only to arrive to, amid confusion, a court case, disappointment and a union that they’d never heard of, threatening to block the streets in protest against the deal. Confused? Most of them were.
“Excuse me,” a fresh-off-the-plane Italian investor, who looked like a clown lost in a circus, at the Department of Energy, asked one of the many young journalists at the press briefing, in Pretoria, on March 13.
“What is happening?”
The confused man from Milan was one of a number of foreign investors, from Spain to the United States, who flew in to sign PPA contracts. Investors expect it will take them a decade to claw back their money.
There was chaos before the investors landed that morning. Overnight, the militant Numsa – a union that appears to have forgotten that the Berlin wall came down – claimed it had won a late-night court interdict against the signing.
When it came to the signing later that day, in Pretoria, Energy Minister Radebe told investors that the courts had in fact not issued an interdict, as Numsa had claimed; it rather postponed the next hearing until March 27. You can understand the confusion of the man from Milan.
“It’s a banana republic,” chirped one of the South African investors in the wake of a day to forget in the course of renewable energy.
<a href="http://www.forbesafrica.com/woman/2014/02/01/shedding-light-renewable-energy/" target="_blank" rel="noopener">READ MORE: Shedding Light On Renewable Energy</a>
More inexplicable for investors was how these IPP contracts raised the ire of the unions almost overnight; there was hardly a peep from them in the years of government foot-dragging over signing them that has left many of the green power producers; at least 14 of the 27, according to industry, sources – on the brink of bankruptcy.
The coal-fired power stations of South Africa, built in the 1970s, are ramshackle and inefficient. Last year, the government said it was going to shut down the 3,000MW Kriel, 1,000MW Komati, 2,000MW Hendrina and the 1,600MW Camden power stations, all in Mpumalanga, anyway.
In any case, renewable energy generates a mere 5% of South Africa’s total power so the chances of green energy elbowing out coal, which produces nearly 80%, are unlikely in the extreme. It is more likely that South Africa’s coal-fired power stations will perish under the weight of repair bills and the cost of compliance with environmental regulations on account of the vast amount of acrid black smoke they belch into the African sky every year.
Other energy experts put down the government lethargy over signing the PPAs to ill-advised complacency. Low growth leading to low demand for electricity, plus a 500% increase in cost since 2007, has seen a cessation of power cuts in South Africa, for the time being.
Under the current energy scenario, South Africa will have more than 60GW of capacity by 2022, against a flagging demand of below 30GW, Ted Blom, a partner at Mining &amp; Energy Advisory, said. 
All in all, South Africa, which once dreamed of building the continent’s leading green power industry, creating thousands of jobs, has done quite a lot to destroy that dream. As well as the near three-year delay over signing the IPP contracts – the government has been penny-pinching, that is, trying to negotiate down tariffs with the argument that the country doesn’t really need energy right now.
What it means is that South African renewable energy producers are now looking across the continent for projects in favour of trusting the backed-up process in their own country. One of the unintended consequences of this whole controversy is likely to be that a score of African nations – who once lagged behind in renewable energy – could find themselves at the cutting edge of the industry thanks to South African technology and knowhow fostered by South African tax money and exported thanks to foot-dragging over contracts in Pretoria. Now, for hard-pressed South African taxpayers, that is an issue worth blocking the streets over.

Solar panels and windmills

Save Jobs Or Save Energy? The Dilemma Of Going Green

It was an African dream to create a cutting edge renewable energy industry in one of the continent’s biggest economies to attract foreign investment and train a pool of talent to run it; that dream is in tatters with the companies, that sank nearly $5 billion into it, left in limbo and out of pocket.
In the next few months, companies behind 37 signed-off renewable energy projects are likely to be on shaky ground because South Africa’s Department of Energy has failed to sign 20-year power purchase agreements. These agreements not only secure a connection to the national grid, but also revenue. Government promised to sign the PPAs on April 11. This evaporated and many fear they may not be signed before the next Integrated Resources Plan – the national plan for the energy mix to take the country to 2050 – to be finalized next year.
Reading between the lines, it appears the Department of Energy is more interested in eking out aging coal-fired operations, which generate more than 70% of South Africa’s power, and planning for a highly expensive nuclear program that could set back the taxpayer $50 billion. There have also been fewer power cuts this year. The feeling among many insiders at Eskom is ‘why should we pay for what we don’t need right now?’ The national power generator also pleads poverty.
“I would say of the 37 projects, 14 are very vulnerable right now,” Brenda Martin, the head of the South African Renewable Energy Council, said.
“If nothing happens in the coming months, companies will not be able to hold on and there will be closures and retrenchments in which hundreds of South Africans will lose their jobs.”
<a href="http://www.forbesafrica.com/cover-story/2015/09/01/power-people-people/" target="_blank" rel="noopener">Power For The People By The People</a>
If you want to check the temperature of the sick South African renewable energy industry you should look across the border into Botswana. It is a minor player in energy, let alone renewable energy, with peak demand of a mere 600MW for its tiny population of fewer than two million compared to around 40,000MW in South Africa.
In May, the state-run Botswana Power Corporation put out a call for an expression of interest for a partnership in a small 100MW solar project. Usually a call like this would attract a handful of bidders. This one attracted a staggering 166 bidders, most from South Africa – a clear indication of the hunger at home. A mere 62 of these were selected.
“It’s just crazy. We have to search to survive,” one of the South African bidders, who asked not to be named, said.
<a href="http://www.forbesafrica.com/focus/2017/06/01/false-dawn-new-nuclear-africa/" target="_blank" rel="noopener">False Dawn For New Nuclear In Africa</a>
The dearth of PPAs in South Africa appears to have unintended consequences across Africa.
“The markets are all opening up across Africa. We have seen shifts happen in sub-Saharan Africa in wind, solar and hydro. Biomass is moving quite fast too and energy from waste is very labor intensive. The bigger companies can go for these projects but the smaller companies won’t be able to afford to,” Martin said.
“But what we are doing now is training wind technicians for jobs in Zambia, Uganda and Ghana. This is the opposite of development that was meant to stimulate jobs for South Africa. We are simply creating jobs for other countries.”
As for a new date for the signing of the PPAs for South African producers?
“I don’t see any strong leadership among government officials right now,” rues Martin.
The Department of Energy requested FORBES AFRICA to e-mail questions over when the PPAs would be signed, which we did and followed up with numerous phone calls. Like the renewable energy producers of South Africa, we didn’t get any joy.

An Ill Wind Blowing Nobody Any Good

They keep their heads low, always looking forward. Shying away from the sun, they pull a load larger than the cars that aggressively race past them. Sweat pours over their worn out shoulders as they struggle for breath. It’s tough work, but they need to eat, they need to live.
This is the daily struggle of informal waste collectors in Johannesburg. They are part of the city; but the city doesn’t appreciate them. They’re called walkers of the street, or the cockroaches of the suburbs.
The waste collectors, however, don’t have any other option. They do this work to survive.
“I had no choice. After [the Marikana massacre] I was retrenched. My mother died and I had no food. I heard here in Joburg that people were making money, maybe R100 to R150 per day. So I thought this is what I need to do to make sure my family and I have something to eat,” says Lebogang Rapoo.
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He smiles when he talks about his five children, but his work means he hasn’t seen them in years.
“I haven’t seen my family in two years, but what can I do?”
Rapoo had no money to go home for Christmas last year.
“I would rather be dead at Christmas time than to suffer the way I did. There was no food, nothing at all. The dustbins were empty and there was nothing I could gather to exchange for food. I was so hungry I did not know what to do. I walked from door to door, the people chased me away thinking I am a criminal.”
Rapoo lives on less than R300 ($22) a week. The bulk of that money is sent home, the rest he uses for food. It is a daily challenge to find recyclable goods they can trade. Finding white paper is considered a treasure for them as one kilogram can pay about R5 (around $0.40). To make an amount worth their while, they need to find at least 10 cardboard boxes a day to earn about R1.20, depending on the sizes of the boxes. Twenty plastic bottles will get them about R5 ($0.40) and cans trade for up to R1 ($0.10) per kilogram.
They are slaves to their own survival.
“Welcome to my home,” says Rapoo, pointing towards a space next to a wall of an abandoned building where Corlett drive meets Oxford street, near the plush suburbs of Melrose and Illovo. He dusts off an empty bucket and spreads a dry washcloth over it, making a seat for me. Rapoo and his eight street-dwelling friends are all sitting on buckets around a small fire made of twigs and dried grass. He stirs a pot of rice and empties a packet of soup powder into a burned coffee tin. His bed is a couple of cardboard boxes stacked on a torn piece of industrial plastic. At night, he covers himself in the plastic to keep dry and warm.
The waste collectors are breaking by-laws by trading on the streets and by using the roads to transport their goods.
“Last week the police came; they chased us away. They burned our beds and all our blankets, telling us to go find another place to sleep. They say the residents don’t want us here. But what must we do? We have nowhere to go,” says Rapoo.
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The unregulated informal industry works on a first come, first served basis. The collectors get up at 3AM every morning. They have to get to the dustbins before the municipalities take away their treasures. They walk without counting the steps; on Mondays they walk to Linden; Tuesdays to Rosebank, Melrose, Parkhurst and Killarney; Thursdays to Northcliff and Fridays to Blairgowrie. The routes they take to collect trash range between five  and 20 kilometers. On Thursdays, Rapoo sometimes sleeps on sidewalks between Northcliff and Rosebank because his ‘house’ is too far for a day’s walk. For this, he earns less than R300 a week.
“I made my trolley into a double decker, so I can carry more waste to recycle. Sometimes I pull 180kg, and then I get more money. Sometimes I only collect 90kg. Every three days, when my trolley is full, I walk to the recycling depot in Alexandra. Then I get money; I can eat again,” he says.
According to Plastic SA, the umbrella organization for the local plastics industry, the informal waste collectors’ treasures make up more than 80% of all recycled material in the province of Gauteng. Without the informal waste collectors, companies like Plastic SA would be out of business.
John Xakaxa, a 50-year-old man from Soweto, has been relying on his eight friends for three months after his recycling trolley was stolen during the night. He says members of a rival group, who wear balaclavas, steal from them. When the men from the other group get to a dustbin and find Rapoo and his friends there, they fight them and take all the ‘goods’.
Supermarkets sell trolleys to the collectors at R150 ($11) each, but Xakaxa has not yet raised enough to buy one. His friend, Gerard Moloi, from Daggakraal in Mpumalanga, has been sharing his food with Xakaxa every night since his trolley was stolen. The eight men living at this very busy intersection also look after their friend Petrus Mpbunda who is wheelchair bound after he lost his leg in a shootout between drug lords in Diepsloot, one of Johannesburg’s largest townships. Mpbunda accompanies his friends on their daily walks from dustbin to dustbin in the leafy northern suburbs of the city.
Despite attracting the ire of many in Johannesburg, some residents and NGOs are reaching out to the waste collectors. WastePreneurs, an NGO in Parkhurst, a trendy suburb in the north, was set up less than a year ago to assist the waste collectors. The NGO provides custom-made trolleys to collectors and pays them R250 ($18.80) if they fill a trolley bin. The collectors deposit the waste at the plant next to the office that was established next to Pikitup, the governmental waste collection company. Godfrey Phakedi, manager of the WastePreneur plant, says the collectors bring the waste to the plant where it is sorted and packed by various employees, creating more jobs for street dwellers. The waste sorters are mostly female. From the 81 collectors, only two are female. The waste is then transported and sold to various recycling companies.
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Sfiso Ngobese, a young entrepreneur from Germiston, has also started an initiative to help the collectors. Ngobese noticed a lady walking past his house every day to search for recyclable goods and decided to build her a reliable and safe trolley. The trolley is bigger and more stable than those from supermarkets and it even has brakes. Ngobese became so inspired that he started a business, called Abomakgereza, to specialize in building these trolleys. His trolleys can be used by waste collectors and be used by companies as mobile billboards. He also buys and sells the waste collected by the trolleys he hands out, thereby managing his own team of collectors. This might be a form of regulation that is much needed for the wellbeing and safety of the waste collectors.
For Rapoo, the journey to a stable life is long and arduous, but it is a walk that he has become accustomed to.

Slaves To Survival

It has been half a year since 195 countries came together in Paris for the adoption of the first-ever universal and legally binding global climate deal. In short, the accord, which will enter into force in 2020, aims to limit global temperature increases to below two degrees Celsius. While some are skeptical, Adnan Amin, the Director General of the International Renewable Energy Agency (IRENA), is optimistic.
“Paris has made a huge step-change in people’s expectations regarding the reality of energy transformation,” says Amin.
Amin predicts that the agreement will be a turbo boost for the world’s renewable energy sector.
“The political ambition we achieved in Paris was only possible because renewable energy solutions have become mature enough to be implementable and viable,” says Amin.
The growing value of renewable investments prove this.
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“Between 2014 and 2015, global investment in new renewable energy capacity jumped from $270 billion to $330 billion. This was before the Paris Agreement. In addition, renewables installed capacity has jumped by 120 percent since 2000, and the costs of technology has fallen dramatically.”
When it comes to alternative energy, Africa is expected to be on the forefront of what Amin calls an energy revolution.
“Renewables deployment in developing and emerging economies has overtaken that in developed markets, including fast-growing economies like the United States,” he says.
“As the electricity demand in mature markets has more or less stabilized, it is soaring in the developing world. The energy demand in Africa for instance, is expected to double, or even triple by 2030,” says Amin.
Amin points to South Africa, Morocco and Kenya as countries to watch.
“The commitment South Africa is making to renewable power generation, and the fact that some projects are delivering solar and wind power that price-wise are more or less on par with coal-generated power, is remarkable.”
While solar PV uses solar panels to capture the sun and convert it into energy, Concentrated Solar Power (CSP) uses mirror structures, known as heliostats, or lenses to concentrate the sun’s rays onto a central point. This concentrated light is converted to heat, and then into electricity.
“South Africa has started to integrate storage components in CSP plants, which is reducing prices even further. CSP is not competitive with coal, South Africa’s main source of electricity, but it is getting there,” Amin says.
He notes that the country is also proving itself in terms of policy innovation.
“I have spent some time with officials there, going through their procurement process. All I can say is that these processes are some of the most rigorous, effective, and transparent I have seen.”
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Then there is Morocco, which recently inaugurated the first phase of the Ouarzazate CSP plant. Upon completion, it will have a 2GW power generation capacity.
“Morocco has gone from very little to no investment in renewables four years ago to $2 billion last year,” says Amin.
“The country has produced some of the most interesting wind and solar projects in the world. Their latest utility-scale wind investment is yielding power that costs $0.03 per Kwh. That is the lowest we have seen anywhere so far,” he says. “The government has bene very clear that this was achieved without incentives and subsidies. Morocco is a game changer in Africa, and is beating everyone else hands down.”
Kenya is doing well too.
“We will see geothermal development move very fast, with very cheap base-load electricity. Kenya is also investing in wind, with the wind farm in the Turkana District going online hopefully later this year,” says Amin, referring to the 250MW wind project, which is the largest in Africa.
Apart from individual countries tapping into renewable energy sources to improve national energy levels, what is more important is the formation of a so-called renewable energy corridor.
“Interconnections have been realized and are being built between markets in eastern and southern Africa,” he explains. “If we can achieve integrated markets with strong regulatory frameworks and transparent policy, we will start attracting financing and investment at a scale we have not seen before in Africa.”
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Going Green  To Light Up  The Continent

Building nuclear power stations in South Africa could benefit other industries that are in dire need of a leg-up.
South Africa’s cabinet has kicked off the Nuclear New Build Programme (NNBP) to get an initial 9,600MW of nuclear power which, according to President Jacob Zuma and Finance Minster Pravin Gordhan, “will be built on a scale and at a rate the country can afford”.
The cost of obtaining this much power will be around $40 billion to $50 billion over 15 years.
Contrary to the view of naysayers, the nuclear power lifetime cost is lower than most technologies. It is also the leading global baseload renewable energy source, topped up with hydro, clean coal independent power producers (IPPs), wind and solar.
The Department of Energy’s strategy has been to engage with nuclear vendor countries, and not only nuclear power plant (NPP) original equipment manufacturers, as they did in the failed 2007 process. Agreements have now been signed with five nuclear vendor countries – France, Russia, South Korea, China and USA/Japan.
These countries are able to supply modern pressurized water reactor (PWR) NPP technology, funding, construction and localization development strategies. Some offer fuel supply and fuel waste management support. These partnerships will last 100 years if you consider the full cradle-to-grave lifecycle of the modern NPP.
Government intends following a transparent procurement process, which will be placed into the IPP Office. This office is currently responsible for the successful renewable energy, baseload coal, and gas to power IPP programs.
“Only once nuclear vendors had entered their bids would South Africa have an understanding of what are the different cost levels [and] what type of technology is available… So it’s going to be a year, or two, or more before we can definitely say how long, how much and over what period of time we are going to be managing this program,” says Gordhan.
The principle vendor countries, and their own domestic technology companies, will look to share risk through international alliances and to embed a strong local content into their offering. This will provide support and funding for broad-based black economic empowerment (BBBEE), the construction and manufacturing sectors, and black industrialists.
Such Sino-Franco partnerships have been successful in building the Taishan NPP in China and the Hinkley Point C NPP in Britain, so watch this space.
South Africa’s nuclear readiness and localisation is an important issue for the initial 9600MW and could range anywhere from 20% to 40%, depending on how advanced the country’s readiness strategy is and its intentions for developing a flourishing nuclear knowledge economy.
South Africa has a proud heritage in power generation construction across all the primary energy technologies, but is now coming off a 2010 construction boom, with a big coal build now rapidly tailing off. The country’s embattled construction sector will be challenged to prepare for a nuclear build program without a well-thought-out and structured national strategy. We need to keep the momentum gained for the foreseeable future.
An early dialogue between the engineering and construction fraternity, the manufacturing sector, government and labor is therefore crucial to devise an incorporated plan for the NNBP. This plan will need to give South Africa about five years to ready itself to ramp-up into the investment and localization of the NNBP and will have to be sustained for at least the following 10 years.
The potential is for over 20,000 construction jobs to be created and a similar amount in the manufacturing and supply to the NNBP. Without a plan, the opportunity will be lost to foreign jobs and higher imported content for the NNBP.
Many industry players could be activated when the NNBP is announced. Supporting infrastructures will be a great stimulus for the local communities near the selected NNBP sites in the Eastern and Western Cape provinces. Currently the local talent pool is small. Group Five and Lesedi Nuclear Services are the only private sector companies currently fully active in the nuclear industry.
In the public sector, the South African Nuclear Energy Corporation (NECSA), Denel, Eskom and the National Nuclear Regulator (NNR) will have major roles in the establishment of the NNBP and in the supply to and execution of the projects.

Can Nuclear Power Up Other Industries?

Wind, solar and hydro energy have all been highlighted as sources of energy that help meet Africa’s growing power needs. Ghana’s Dela Wosornu is using garbage.
Decomposing organic material, known as biomass, releases gas that can be used to create energy in the form of biofuels. In Ghana, a country with a vast amount of degradable material, it is a viable option for alternative energy.
In Ghana, energy is costly and scarce; this hinders economic growth.
Biomass, such as wood and charcoal, is Ghana’s main energy source, supplying around 60% of the total energy used in the country. Biomass resources cover about 20.8 million hectares of land mass in Ghana. Most of this land is made up of crops and plants that can be converted into solid and liquid biofuels. Wosornu, a renewable energy entrepreneur, is taking advantage of this by transferring landfill gas to energy.
He is involved in the Oti Sanitary Landfill Gas-to-Energy Project, which eliminates the emission of harmful greenhouse gases as well as the spread of disease from the waste. The project reduces the reliance on producing power from fossil fuels by producing energy from the waste that would have otherwise been buried in the landfill.
The solution is quite innovative.
When organic material, such as food waste, is buried in the landfill, it is deprived of oxygen. In this condition, the organic material will decompose and turn into methane gas. The methane will slowly be released into the atmosphere, causing global warming. The project at the Oti landfill doesn’t let this happen. They cover the landfill with soil and drill holes into it. Pipes are then inserted and the gas is sucked out into a generator which makes heat and electricity.
“It’s really a matter of just bringing pipes to where the gas has collected and pumping it out through a vacuum process and then directing that gas to a generator,” says Wosornu.
According to Wosornu, the project is the first of its kind in Ghana. As cities grow and produce more waste, the environmental impact from open dumps becomes increasingly intolerable. The conversion of dumps to engineered landfills like the Oti project is essential.
“Our solution can be applied at any landfill that has received at least 400 tons a day of municipal solid waste and is in reasonably good shape. As there are many landfills in Africa and around the world that are not capturing gas, the future for landfill gas to energy projects is bright,” says Wosornu.
Landfill gas to energy projects have underperformed relative to projected gas and power output. Bearing this in mind, the projected output of the Oti project has been discounted by 70% so that its actual output will meet or exceed the projected output. The Renewable Energy Act in Ghana ensures that there are set prices for each class of renewable energy. It also offers an opportunity to redirect future investments into green energy.
The challenge for Wosornu, is finding reliable buyers for the project’s output. The high cost of doing business in Africa also makes the development costs of these projects higher than the rest of the world.
“There is no doubt that, if properly exploited, renewable energy resources in Africa can make a significant contribution to the continent’s energy supply. In particular, the potential of biofuels on the continent is huge. Within the context of the current financial crisis, stakeholders including policy makers, international partners and the UN should lead the debate on and collectively seek strategies for scaling up renewable energy use so as to increase access to energy and enhance energy security among the many potential benefits of these technologies,” says Kandeh Yumkella, Director-General of the United Nations Industrial Development Organization (UNIDO).
Wosornu is playing his part.

Full Steam Ahead

From Junk To Power

When Luke Callcott-Stevens, Gavin James and Doug Jenman first talked to FORBES AFRICA in 2012, they struggled to imagine what their $274-million 100MW wind farm in Dorper, South Africa, would look like. A big project with big risk.
“We built a wind farm, we installed it. All those are effectively at the cost of capital. Now it’s done… Every three days a wind turbine is being installed in South Africa,” says Jenman.
Forty wind turbines and two and a half years later, this trio from Rainmaker Energy can not only take pictures of Dorper, a tiny town in the Eastern Cape province, they are now imagining that they can cover the rooftops of London with solar panels.
“The cities of tomorrow will produce their own electricity. We won’t need power stations,” says James.
With this bold idea, the trio set up shop at 81 Rivington Street, an old electrical showroom, in London’s tech hub Shoreditch, and also, by coincidence, labeled with a fitting coat of arms “More Light More Power”.
“A lot of our growth is happening in the solar field, and it’s out of South Africa. We’ve set up a separate company in the UK, Solar Stone Energy; effectively we are trying to create a utility scale solar project on rooftops. So we are aggregating a bunch of rooftops to build a big solar power plant,” says Callcott-Stevens.
It gets even more pie in the sky – especially when we are talking about a city where the sun doesn’t shine often – the trio want to give solar panels for free.
“We cover the costs of the installation and on-going monitoring and maintenance. There is absolutely zero cost to you. You then get to enjoy the immediate benefit of reduced energy costs because the electricity, which is produced on your property’s roof is yours to use, for free. By generating electricity on your roof, we receive a Feed-in-Tariff (FiT) through a government-backed subsidy program. This is how we fund the solar installations and make a return on investment. It’s a win-win for everyone.”
They feel it could find favor with London’s 8.3 million people.
“If you look at what’s happening in the States and in Europe, in solar and wind energy, people are putting solar on their roofs and creating their own power. That is not a total solution, but it cuts back on the need to create new power plants, it changes the game. The utility business is now losing out on its most profitable market. That demand is now gone,” says Callcott-Stevens.
“Solar has gotten cheaper. Next storage is going to get cheaper. That’s not to say you won’t have coal or nuclear power stations. It just changes the game. It changes the dynamics,” says James.
Back home in sunny South Africa, where 39 renewable energy projects contribute 1,800MW to the grid, the trio’s 100MW wind farm in Dorper has been humming for more than a year. Although James says it will take another 16 years to see a profit, it couldn’t have come at a better time. Eskom, South Africa’s power supplier, regularly cuts the power – a legacy of under investment and delays in coal-fired power stations, such as Medupi and Kusile. The work of renewable energy dreamers has been a saving grace.
“Eskom’s troubles are our blessings in the whole [renewable] industry. It’s been good. The government has put its weight behind the program,” says James.
“They are seeing results and they are happy with it, so the whole fear that renewables is erratic and unreliable actually is false. Apparently the first projects have reduced power cuts by half. We would have double the power cuts if it wasn’t for the renewable projects,” says Jenman.
The competition for new projects is stiff. Last year, Eskom announced that 77 bids were received for Round 4 of the program, for a total of 5,804MW. Of these, 13 were accepted as preferred bidders, for a total of 1,121MW installed capacity at a cost of R23 billion ($1.8 billion).
“By the fourth round, the tariff prices have halved. The game’s changed. The perception of risk is gone. In Round 1 there was no market in South Africa; people were taking a lot of risk without knowing if there was going to be a market. They needed higher returns. Where we are now, the return expectation is lower, as it should be, as the market grows and matures,” says Callcott-Stevens.
“Without getting those high returns in the beginning we wouldn’t be in a place where we are established,” says Callcott-Stevens.
Hope of more business in Africa is in the wind. The trio has a further 330MW of wind and 290MW of solar photovoltaic (PV) projects under development in South Africa.
“Africa is the future – solar is all over. There is potential everywhere. Sub-Saharan Africa is obviously closer to home so it’s easier to look at. The [solar rooftop] model works really well in a deregulated market. In South Africa, we are still highly regulated,” says James.
“The rest of Africa is highly regulated. Either badly regulated, or highly regulated. We don’t want to just get on a plane and go find a site. We like to have an angle before we choose a market. There needs to be a reason before we can just go into that market. We can’t just go into a country and just say we are building a solar plant. We need to have relationships, we need to know people, we need to understand the market first,” says Callcott-Stevens.
From the dream of a small windy farm in the middle of nowhere, in Africa, to the reality of free solar panels on the rooftops of London where the sun hardly shines. What next?

The Cities Of  Tomorrow  Won’t Need Power Stations

She is the fresh face of renewable energy in Africa. By a twist of fate, this young lawyer, who grew up with her grandmother by candlelight, is now spearheading Africa’s dash for energy.  Sometimes it hurts.
“It feels like I haven’t slept for four years, I have been so busy working on deals. But it was the deal of a lifetime.”
So says Linda Olagunju on her deals to put two wind farms and two solar photovoltaic (PV) farms onto the barren landscape of De Aar in the Northern Cape. Two deals she patched together that will contribute 254MW to South Africa’s energy grid.
“The wind projects reached financial close and are currently under construction. It’s a partnership between China Longyuan, Mulilo and DLO Energy Resources in De Aar. It’s been almost one year of signing documents. The legal fees on these sorts of transactions can go up to R20 million ($1.57 million) if you are lucky.”
It’s the fruit of the Renewable Energy Independent Power Producers Procurement (REIPPP) program. In short, Eskom, the country’s power generator, attracted bids for private business to apply for tenders. Under it, investors generate electricity for sale at a tendered rate. This brings the total committed private sector investment in the REIPPP, since 2011, to $13.25 billion (R168 billion). It is fierce competition.
“There about 85 solid IPP [independent power producers] developers in South Africa. In Round One to Four, there was 5,200MW on offer, the next rounds are 6,300MW. It’s a bloodbath. You are competing with international companies that are coming in dirt cheap,” says Olagunju.
This may be a drop in the ocean but it’s a very important one. Renewables have been a saving grace. According to Olagunju, 39 of these projects are up and running, supplying 2,050MW to the grid.
“It’s the first successful program since democracy. It’s not that there haven’t been any independent power producer programs on the continent. It’s just that this one is the largest one of its scale and being backed by government.”
Olagunju’s childhood was far from electricity. She grew up in Matatiele, a village in the Eastern Cape 782 kilometers from the boardrooms of Sandown where she now works and lives with her Nigerian-born husband.
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“It was rural, like candle rural… [My grandmother’s village] only got electricity in 2005,” says Olagunju.
This was in time for the power cuts of 2008, when Eskom admitted that it had run out of capacity to supply electricity. At this time, Olagunju had left home to follow in the footsteps of her father and study law. At the University of Cape Town she studied laws governing fossil fuels rather than green energy.
“I’ve always known I was going to go into resources. I just didn’t know if it was going to be mining or oil and gas. The biggest thing for me is why Africa, which is so well endowed in resources, remains the poorest continent. I always hated injustice, growing up in apartheid South Africa,” she says.
Olagunju struggled to find her niche and ended up as a lawyer for Mulilo, a startup renewable energy company in 2008.
“Mulilo needed a lawyer, but couldn’t afford any. So I said I would do the services in return for shares. I still had to pay for them. At the time, the company [owed] R11 million ($870,000) and the company is now valued at R5 billion ($394 million)… in three years,” she says.
This sparked her idea of entrepreneurship.
“I always felt the way to change things is through entrepreneurship. Through law I had the opportunity to see how government makes these decisions on large scale projects… I said ‘hang on a minute, we have a lot of wind in South Africa and we have a lot sun in South Africa, so why haven’t we put renewables on our grid?’ I started doing research,” she says.
The business of renewables can take years to see a profit.
“There is a lot of risk, anything can go wrong. You are in a contract for 20 years, governments can change and I know there are laws to take care of that risk. The wind may not blow for as long as you thought it would. Your sun may not shine as brightly as you thought it would. They are long-term projects.”
“You identify the land. You go into lease agreements. Do an environment impact assessment (EIA) process that can take three years if you are lucky. You then bid your process with a construction period. If everything goes right, [a farm] will be up in 20 months.”
“Then you start seeing a trickle dividend. A trickle dividend at connection in the first seven years is very minimal. It’s nothing to write home about. It’s not even enough to pay your operational expenses.”
Then, there are the hiccups.
“We have existing infrastructure. And then we have the [REIPPP]. The grid infrastructure hasn’t been expanded to accommodate the increasing demand on that particular infrastructure. It’s not Eskom’s fault necessarily. It’s a matter of planning.”
“One of the points we raised before we began these projects is getting the grid contacted properly before you have a program. But it’s always difficult how you spend on infrastructure not knowing where those programs are going to be awarded.”
“Eskom said that they have developed a map where they now know where the hotspots are for energy projects and where now they are doing their best to upgrade in those regions in anticipation of the other [REIPPPs] being built.”
Olagunju believes gas, coal and nuclear could all go the same way.
“You can go and leverage an asset and try and participate. The key thing about these deals is to learn from them. Once you do one, you have built a portfolio. You can go and knock on a door in Nigeria, rather than say you have an idea,” she says.
If you are Olagunju, at the tender age of 31, you could also argue it’s good to have a foot in the door.

A Bloodbath In The Wind

From the boardwalks of Cape Town to the streetlights of Kigali, billions are being made out of renewable energy. It brings business and government together; it could end the days of smoke-belching coal-fired plants. It could answer Africa’s most burning question – power.
In 2011, many experts scoffed at the thought of Africa running on towering wind turbines and miles of solar panels. It was too expensive; it was inefficient and couldn’t stay charged. But, armed with new technology, a pack of young entrepreneurs dug deep to harness the wind and the sun of Africa, to power future generations.
In this continent, South Africa’s Renewable Energy Independent Power Producers Programme (REIPPP) has moved the fastest. In a few short years, South African entrepreneurs have invested $13.25 billion to sell electricity back to Eskom, the country’s hard pressed power generator.
It is fierce competition. According to South Africa’s President Jacob Zuma, 1,800 megawatts (MW) are on the grid and in the next two and half years, 92 projects will generate up to 6,327MW. Further investment into hydro, gas and nuclear power are also on the cards, says Zuma.
The faces driving this investment are fresh. Thirty-one-year-old Linda Olagunju who grew up in an African village by candlelight is now calling the shots in boardrooms. Homegrown entrepreneurs Luke Callcott-Stevens, Gavin James and Doug Jenman threw in their safe jobs for the cutting edge of renewable energy generation. These are a few of the young and restless generation of investors who are taking risks to charge Africa.
It’s a story that breezes through the wind turbines in South Africa to the landfills in Ghana to the underground heat of Kenya.
Some old heads, like nuclear physicist Kelvin Kemm, say that nuclear may yet have a bigger say. He believes three quarters of African countries can become nuclear within the next six years.
It all adds up to an exhilarating story of youth, vision, risk and reward. This month, FORBES AFRICA dedicates our cover story to it.

Tag: Wind

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