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11 Apr 2012 10:04:58

South African PV market gears up for substantial growth

PV Insider reveals the important steps South Africa has taken to meet the targets for renewables in the 20-year master energy plan, the IRP

In March 2011 the South African Integrated Resource Plan (IRP) was finalized, and after much debate surrounding the tender aimed at renewables, the clear winner was PV. The IRP proposed that renewables would equate to 42% of the new build generation capacity, a total of 17,800MW from PV, CSP and wind. By December 2011 the Department of Energy had received 53 bids across all the different technologies, awarding 632 MW of PV, 150 MW of CSP and 634 MW of Wind.

While the PV industry faces the effects of large cuts in feed-in-tariffs across Europe, and with a cloud of uncertainty surrounding the US industry as subsidies end, experts anticipate further growth in South Africa. 18 projects were awarded in the first round of the IRP and a further 650MW of photovoltaic capacity is expected to be confirmed by August. Furthermore, South Africa’s PV pipeline has been boosted by the recent news that projects will begin construction this year.

Soitec, one of the developers selected by South Africa’s Department of Energy as a preferred bidder under the IRP, announced that their 36MW CPV project in Tousrivier in the Western Cape has secured finance from Investec and construction will begin later this year. Also with support shown by the African Development Bank, Absa bank, Standard bank and the IFC to finance photovoltaic projects in the region, experts believe that developers will continue to secure financial backing and meet the June deadline set under the IRP.

However, despite this progress the long-term sustainability of utility-scale projects is by no means guaranteed and costs will need to continue to decline if the industry has any hope of competing with cheaper, more established forms of energy production. Utility-scale PV plants are new territory for South Africa and as the industry moves away from off-grid applications the development of large-scale plants will present many challenges. Predicted issues range from grid instability and the lack of local skilled labour to meeting the procurement targets set out under the IRP. Developers are advised to move fast to meet their deadlines and complete projects on budget.

On Tuesday PV Insider announced the launch of the PV Project Development Summit South Africa, taking place in Johannesburg on 3-4 September. The event will bring together experts from leading international and local PV companies: the first names announced by event organizer Jack Ahearne included First Solar, Juwi Solar, Solar Reserve, Soitec, Fotowatio FRV, Gestamp Solar and Fluor, who are all set to share their expertise on optimizing PV plant development and reducing costs .

When questioned, Ahearne pointed to the attendance of leading South African companies including Momentous Energy, BioTherm Energy, Mainstream Renewables, Group 5 and Eskom in highlighting the importance of PV in the emerging South Africa renewable energy economy.

“As the momentum behind utility scale PV continues to build in South Africa, it is vital that developers, EPC groups and investors acknowledge the impact that streamlined project development can have on lowering the costs for PV in this market” Ahearne explained.

The event is set to take place on 3-4 September in Johannesburg, with over 150 delegates in attendance.

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