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SA’s young and diverse renewable energy sector is getting organised

With the creation of Resef – a smaller, legitimate and properly constituted forum able to engage with government meaningfully.
The Ministerial Renewable Energy Sector Engagement Forum (Resef) aims to address bottlenecks that may be inhibiting the delivery of renewable energy. Image: Andrew Harrer, Bloomberg

South Africa’s existing renewable energy industry associations are somewhat inwardly focused and vie for membership and relevance among a membership base of developers, independent power producers (IPPs), technology providers, original equipment manufacturers (OEMs), equipment suppliers and installers.

However, the traditional boundaries between suppliers and customers of renewable energy are changing radically, as customers and consumers also become generators or producers of electricity within the supply chain.

Read: Renewable energy (finally) takes centre stage

Things are moving fast, from the former environment where Eskom was the single buyer of renewable energy from IPPs, towards a diverse, competitive and multi-faceted renewable energy sector.

Eskom, the biggest customer of renewable energy, is today also a generator of renewable energy – and has ambitions to increase its renewable energy production.

Municipalities are also targeting renewable energy generation.

So too are mining, industrial, commercial, agricultural and even domestic consumers, with generation regulations slowly catching up to accommodate these changes.

Read: Renewable electricity suppliers gaining ground

A rapidly changing sector

It’s clear then that very basis and nature of stakeholders making up the renewable energy sector is undergoing major and rapid change. No longer can an exclusive group of renewable energy industry associations – representing developers, technology providers, OEMs, equipment suppliers and IPPs – claim to constitute, represent or act as ‘the voice’ of the renewable energy sector.

Read: Refinancing of renewable IPPs won’t temper electricity tariffs

Other, more mature and formalised structures within government and beyond have developed alongside the renewable energy industry associations – including government agencies, Eskom, municipal electricity, organised business and labour, energy-intensive users in mines and industry, commercial banks, development finance institutions, investment funds, professional associations, civil society and more.

These stakeholders also want to participate in structures representing the new and broader renewable energy sector.

This is a normal progression, as traditional electricity customers also become renewable energy producers, and as financial institutions and other key stakeholders start to play a critical role in the sector’s growth, in line with the Integrated Resource Plan (IRP 2019) for electricity.

A sector needing to speak as one

So, when Mineral Resources and Energy Minister Gwede Mantashe noted a need to sit down and engage with a renewable energy sector that could “speak with one voice”, it was not going to be as straightforward a case as with the Minerals Council South Africa, which has evolved over a period of more than 100 years and is able represent the broader mining sector, with formalised structures in place.

Nor was it simply going to be a matter of inviting the existing renewable energy industry associations to the Department of Mineral Resources and Energy (DMRE).

Rightly or wrongly, the minister perceived these associations to be “lobbyists” and renewable energy project salespersons dominated by foreign developers and IPPs controlled by these developers, focused on closing the next deal rather than serving the broader renewable energy sector and the national interest.

A new, legitimate and inclusive initiative that could engage meaningfully with government representatives on an ongoing basis was needed – and the Ministerial Renewable Energy Sector Engagement Forum (Resef) was conceived.

Purpose

The ultimate purpose of the initiative – for which the European Union Delegation to South Africa has provided independent technical, administrative and advocacy support, as well as funding in a bid to advance South Africa’s green economy – is to provide a platform and forum of communication to address bottlenecks that may be inhibiting the implementation of government policy and planning commitments in respect of the delivery of renewable energy.

The DMRE also made it clear that the Resef initiative should be aligned with other DMRE and Department of Trade, Industry and Competition-led initiatives, such as the South African Renewable Energy Masterplan (Sareem). Sarem is part of a planning process that seeks to identify specific industrialisation opportunities in the renewable energy value chain, and shares a common set of stakeholders with Resef.

Representivity

Mantashe addressed the first founding meeting of Resef on July 16, and there was overwhelming consensus from about 150 attendees for its establishment. At the meeting, the minister said the engagement had “exceeded his expectations” and that he was “happy with the representivity” of the meeting. He subsequently wrote: “It was a good forum. It must be repeated.”

Following a call for nominations from the various stakeholder clusters identified, a second founding meeting of Resef was held on October 20, at which the attendees overwhelmingly approved and ratified both the its composition, as well as the nominations from the various stakeholder clusters for seats and alternate seats on Resef.

These names have since been forwarded to the minister and the DMRE, together with a list of suggested key issues to be addressed in further engagements.

Funding

Up to now, unconditional funding for the work of the independent facilitator for the two Resef founding meetings has come from four renewable energy sector industry associations – the South African Photovoltaic Industry Association (Sapvia), SA Wind Energy Association (Sawea), SA Independent Power Producers Association (Saippa) and the SA Energy Storage Association (Saesa) – as well as the European Union Delegation to SA and the British High Commission in SA.

While good progress has been made, significant work must still be done to ensure that Resef is established, bedded down, becomes functional and operates as intended.

Effective and transparent stakeholder management and communication is critical throughout the process in order to ensure trust between renewable energy sector stakeholders themselves, as well as a constructive engagement with the minister and his DMRE officials based on mutual respect, goodwill and the acceptance of good faith.

Initial efforts to establish the right posture, form, process and structure may be considered somewhat slow.

Building trust

However, these efforts are necessary to build trust and pave the way for ongoing engagement on the substantial issues, in a smaller, legitimate and properly constituted forum, Resef, that enjoys the confidence and support of all participants, and has the effect of expanding the pie – something the South African economy desperately needs.

To borrow some wise words from the Sarem initiative: One needs to “move at the speed of trust”.

Chris Yelland, MD of EE Business Intelligence, was independent facilitator of the first two founding meetings of Resef. His work in this regard was funded by the EU Delegation to SA, the British High Commission in SA, Sapvia, Sawea, Saippa and Saesa.

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“ Municipalities are also targeting renewable energy generation.”

Unfortunately in the case of Drakenstein (Paarl), they are targeting renewables, but not in the way the article hoped.

They slashed their feed-in tariff to below what their lowest time of day tariff is = whereas obviously most solar exports happen in standard rate time middle of the day.

The forced people off Time of Use tariffs onto a very weird version of Bulk. Basically you pay them less than what they pay Eskom for your kWh, but you pay them R315/kVA for peak power = about 5 times what they pay Eskom for kVA.

All that will happen is the very predictable unintended consequence that those users that can will move most of their loads off-grid and taxpayers will lose those that revenue forever.

It’s irritating how much German lobbying is going on. I thought the demand for green energy in Germany itself was unlimited? So how come they’re seeing opportunity in Africa to offload turbines?

Or did they overinvest back home, raising the price of their electricity beyond what the taxpayer would tolerate, and now with the window shut, they’re looking for a soft target overseas?

End of comments.

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