Eskom goes green: Secures €75m loan for solar power plant

South Africa is a treasure trove of natural resources. Especially when it comes to utilising those resources to ensure that we exploit the year-round sunshine whilst being kind to the environment. We don’t have the best track record of environmentally friendly practice, especially when it comes to large-scale utilities like our power supply. It is for this reason that the European Investment Bank’s €75 million loan to Eskom to support its solar power project is very exciting. Alec Hogg was joined by Ayanda Nakedi, Senior General Manager of renewable energy at Eskom to discuss the development and where we are headed in terms of renewable energy. – LF

ALEC HOGG: Welcome back to Power Lunch. Our power utility, Eskom, has agreed a 75 million Euro loan, with the European Investment Bank, to support a 100 megawatt, concentrating solar power plant. Ayanda Nakedi is Senior General Manager of renewable energy at Eskom. One of the nicest jobs, I guess, at Eskom because it is an area that is expanding and expanding rapidly, renewable energy and exciting because prices are coming down.

AYANDA NAKEDI: Yes, Alec, it is quite exciting and it’s exciting to be part of the new journey that South Africa is undergoing. Implementing renewable energy and taking advantage of the free sun that we have and the wind that is available.

ALEC HOGG: Sunny South Africa, yes, and windy South Africa I guess, as well.

AYANDA NAKEDI: And windy South Africa and we have got one of the highest DNI.

ALEC HOGG: What does that mean?

AYANDA NAKEDI: We have got one of the highest solar radiation levels in South Africa and, if you think about it, we have not even begun to tap this resource, this free resource that we have. It allows us to produce plants, clean one’s, without any pollution.

ALEC HOGG: Where are these big solar operations going to be, based?

AYANDA NAKEDI: If you are talking about plants similar to the ones, that Eskom is building. They are around Upington, and that is the area, which has got the highest solar radiation levels and there are other plants. In fact, that are next door being, built currently, with Eskom and some of them will be feeding into the grid in December/January, so the country, indeed is moving and this plant of Eskom, will be built alongside the private sector, in terms of the integrated resource plan.

ALEC HOGG: So, the heat of Upington is actually coming to our benefit, in some respect. But with solar doing as well as it is, and the investment that’s coming there and the prices falling all the time, why are we still talking about nuclear energy? That was a question that a Senior Executive of Hanover Reed put to me yesterday, I couldn’t answer but hopefully you can.

AYANDA NAKEDI: Yes, remember South Africa has made a decision to diversify energy mix. In diversifying energy mix then you deploy all the other technologies that assist you to move towards a low carbon economy. That is why you will see wind. That is why you will see solar PV. That is why you will see CSP, which is this consecrating solar power, and that is why you will see nuclear because you are talking an energy mix.

ALEC HOGG: But why, if something is so much more expensive, and the price is high, and something else is cheap and the price is falling, should we even bother? Why be enslaved to diversity?

AYANDA NAKEDI: If you talk to the nuclear guys, remember you also need to understand that there are benefits that nuclear brings.

ALEC HOGG: In other words, what is the benefit of nuclear?

AYANDA NAKEDI: Yes, it is also safe. It also has…

ALEC HOGG: The Japanese won’t agree and the Russians wouldn’t be too sure about that.

AYANDA NAKEDI: But remember, Alec, I’m here for ‘renewable’, so let’s get back to ‘renewable’.

ALEC HOGG: That’s all you had to say, Ayanda.

AYANDA NAKEDI: Yes, let’s talk about the Eskom plant.

ALEC HOGG: Yes, so let the nuclear guys go and defend themselves.

AYANDA NAKEDI: Yes.

ALEC HOGG: Where are we likely to go, into solar, into the future?

AYANDA NAKEDI: Let me first start with the plan. South Africa has allocated 42 percent of new generation capacity to renewable, so you can really see the capacity and the commitment that South Africa has done. Alongside this, then there is allocation that’s given to different technologies. You have got 1.000 megawatts that this plan has allocated, particularly to the concentrating solar plant that we are talking about. Now, Eskom then also received an allocation to build this 100 megawatts plant, but I need to tell you more about this particular technology. Given the calls that Eskom has been making, saying we need to help us to bid the pick, this particular technology allows us to store power and it is available in the evening.

ALEC HOGG: At night, yes, when the sun isn’t shining.

AYANDA NAKEDI: At night, when the sun is not shining, and that’s the beauty of it, and it is dispatchable and it allows and it assists the system operator to give it more power in the evening. In this particular one we are looking at minimum nine hours of storage, for this particular plant.

ALEC HOGG: It’s a good, it’s a really, lovely story and, in fact the whole renewable energy story in South Africa is one of our great successes but when are we going to get to private individuals? Like in Germany, where you see solar power in a country that doesn’t have the sun that we have, installed into the citizens, the active citizens of the country. Are we looking at doing something similar?

AYANDA NAKEDI: Yes we are, but remember when you look into different countries, countries have their policy, and they have what is called a feeding tariff that drives these technologies drastically. If you look in South Africa, we are moving into that, Alec. We will have people who will install solar PVs in their own rooftops. They will power their own buildings and, if you look at Eskom, we have already started, there is nothing that is stopping a big building from installing solar PVs in order to fund and generate that power, for self-consumption and feed power into the grid.

ALEC HOGG: But can they sell that to the grid?

AYANDA NAKEDI: What has not been done, remember we need to address the issue of net metering, so that your meter can be able to sell power into the grid, and when you need it, you are able to buy back from the grid. That is the part that we still need to resolve so that it becomes easy for everyone else to be able to do it. If you look into the mine, there is nothing that is stopping the mine from installing all of this, and it just feeds power to itself.

ALEC HOGG: Ayanda Nakedi, thank you for joining us, the Senior General Manager of Renewable Energy at Eskom and, as she says, let the nuclear guys actually make their own arguments. That’s all from us, here in South Africa. After the break, our Southern African viewers will cross to international programming. The rest of Sub-Saharan Africa can catch Power Lunch, West Africa. Have a great weekend. Cheerio.