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The role that renewable energy can play in the regeneration of the South African economy

This presentation discusses the important role that renewable energy can play in the regeneration of the South African economy. It aims to promote the renewable energy sector in South Africa and remove barriers hindering its growth. The presentation also highlights the potential job and investment opportunities in the sector, as well as the need for government support and policy adjustments.

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The role that renewable energy can play in the regeneration of the South African economy

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  1. The role that renewable energy can play in the regeneration of the South African economy PPGI Presentation @ BUSA Economic Indaba 29 January 2019 Gallagher Estate

  2. MAIN OBJECTIVE: • Promote the Renewable Energy Sector in South Africa • Act as an umbrella body for industry associations representing specific RE sectors • GOALS : • to collectively remove barriers hindering Renewable Energy; • to provide expert resources to support Government in the formulation & execution of energy policies; • to promote public and private sector coordination towards cost optimisation of RE generation & localisation of the RE industry; • to engage with other active SA organisations in the broader fields of climate change mitigation/adaptation and sustainable development • to liaise with local and international media regarding RE in South Africa; • to promote excellence in RE and related areas of business and to provide information to government, media and the public on behalf of the industry. - Confidential -

  3. Introduction • Renewable energy is a new economic sector for South Africa • Introduced by policy adjustment to IRP 2010 • Since 2012, renewable energy has been the largest contributor to new generation capacity globally • In 2017 solar alone added more new power than coal, gas and nuclear combined • Globally a massive disruptor to conventional fossil-fuel based electricity systems • In light of RE economics, 57 countries have drawn up plans to decarbonize their electricity sectors completely and 179 have set national or state renewable energy targets • In India, declines in wind and solar prices have created $30-40 Billion of stranded coal projects sitting with banks • Since the introduction of REIPPP there has been a sharp decline in solar and wind tariffs • Rapid proliferation of SSEG - Confidential -

  4. Renewables: South Africa • REIPPP commenced in 2012 • Projects adjudicated on combination of tariff (70%) and ED commitments (30%) • 4 Rounds implemented • 6 422MW procured from 112 IPPs • 3 776MW (62 IPP projects) connected to grid • R 259 Billion of equity and debt raised across the 4 rounds • SA ownership @ 48% • Black ownership (31%) including community ownership • 36 528 job years created for South African citizens • Local content spend across 4 rounds = R 67,1 Billion • SED spend of R640,3 million; ED spend of R204,6 Million (June 2018) - Confidential - Source: IPPPP Overview (as at 30 June 2018), IPP Office

  5. Renewables role in assisting in equitable growth - Confidential -

  6. Job and investment potential • Currently the roll out of utility scale renewable energy is determined by DOE via the IRP and ERA. • Draft IRP 2018 only anticipates new wind and solar procurement in 2024 • Government needs to make strategic decisions to provide short term support for a sector that will become a mainstream electricity generation source post-2025 if South Africa wants industrialization benefits • >1 Million megawatts of wind and solar will be deployed globally before DOE awards the next RE MW in South Africa • Cost of earlier deployment of renewable energy maybe a deviation from least cost worth paying • The industry has requested policy adjustments (1.5GW of wind and solar per annum) to increase capacities and bring forward solar and wind allocations in the final gazette IRP - Confidential -

  7. Government support: regulation The renewable energy sector has suffered from a ”start stop” process since its inception. From a policy perspective, need the following - Confidential -

  8. Government support: structural • Need to use procurement mechanisms to ensure • Wider geographical distribution of wind and solar IPPs across the country • Broader spread of ownership in IPPs in South Africa, allowing for greater participation by Black Industrialists, Women and youth. • Facilitate the transition of the electricity sector to 4th Industrial Revolution modalities • Facilitate access to climate finance • Promote the Just Energy Transition • Finance • South African DFIs and financial institutions have not made competitive funding options available to legitimate Black players and communities • Constraining the creation of black energy champions The renewable energy industry has bold and implementable plans for the country which will contribute to making electricity more affordable for its people, competitive for Business and allow South Africa to become a global clean energy hub - Confidential -

  9. Thank you - Confidential -

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