Power blowing in the wind

EVEN though everybody agrees South Africa has an energy problem, trying to solve it is a different story.

While some insist on powering ahead with the current mix of dirty dinosaur era coal and cleaner – more dangerous – nuclear energy, others say looking towards nature and using renewables like wind, solar and even sea currents are a better long term option.

According to Windlab Windlab Chief Executive Officer (CEO) Peter Venn, who is involved in two massive wind farm projects each boasting 50 turbines near Bedford, one of the best things about renewable energy is they cost the taxpayer and the government nothing to build.

Funded by investors from all over the world, Venn points out costly mistakes in recent decades building wind farms in Europe has refined the process to such an extent that the Department of Energy’s Renewable Energy Procurement Programme is regarded as one of the most sophisticated in the world with independent power producers required to meet very stringent qualification criteria in order to even be considered.

“There is no real learning curve as the technology is improving all the time and we can go straight to the latest and greatest on the market.”

He said while taxpayers forked out Eskom electricity tariffs to fund Medupi, renewable energy companies took all the risk themselves – until they hooked up to the grid and started selling power.

Venn explained one of Windlab’s projects at Amakhala near Bedford was going to cost R4-billion of which R3-billion was debt and R1-billion funded by equity participation.

The scramble for renewables has been huge and the first two rounds of tenders generated R74-billion in investments.

“There has been an oversubscription of investors as it provides a nice income stream for 20 years based on a (set) government contract.

“You have got the price for 20 years and you know what you are getting.”

Instead of just slapping up turbines all over the show and hoping they will catch some breeze, companies like Australian based Windlab use high tech computer wind mapping to pinpoint the best locations around the world.

They then conduct lengthy tests to work out areas with the least negative impacts on avian activity and get investors in to finance the 20-year project.

“There has been quite a bit of negativity in Germany to renewables because turning off the coal power stations and building turbines and renewables is costing consumers more than they anticipated – and they are objecting.”

According to Venn, renewables were the cheapest form of new electricity and would come in up to 50% more cost effective than Medupi.

Besides obvious cash benefits for investors and financially stretched farmers – who lease land to the wind farm operators for turbines and are also paid a royalty – rural communities also stand to benefit thanks to a minimum (legislated) 2.5% equity stake usually in the form of community trusts.

“Many projects are offering communities a substantially higher stake,” Venn explains.

Dividends from the wind farms would be spent on initiatives identified by the trusts.

“Over the 20-year operating period of a wind farm, this investment will be used for much-needed development like medical care facilities, schools, small enterprise facilities and sports facilities.

“This could spell the difference between misery and dignity for thousands of people mired in generational poverty.”

Besides boosting nearby local economies, renewable energy projects also lead to improved roads and other infrastructure.

According to Venn, one way to help solve the energy crisis would be to introduce a “variable tariff” where consumers would pay more for usage during peak times.

“It only takes two minutes to turn off the dial of the pool pump or the geyser but people are not doing it because there are no penalties.” — davidm@dispatch.co.za

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