Changing the longstanding course of its energy policy by looking to develop a diverse base of renewable energy resources, South Africa, over the course of just a few years, has emerged as (pardon the pun) a hotspot of solar and renewable energy investment and project development. The renewable energy policy and institutional framework South Africa has managed to erect has now attracted Google, which on May 30 announced its first renewable energy investment in Africa.
A leading corporate proponent of renewable energy in the US and across its operations, Google is investing $12 million in the $260 million Jasper Power Project, a 96-megawatt (MW) solar photovoltaic (PV) facility to be built near Kimberley in South Africa’s Northern Cape Province, according to a post on Google’s Official Blog.
Developed and funded by SolarReserve, Intikon Energy, and the Kensani Group, Google joins Rand Merchant Bank, the Public Investment Bank, Development Bank of South Africa, and the PEACE Humansrus Trust in investing in and bringing project financing to a successful close.
South Africa’s Solar PV Jasper Power Project
Upon completion, the Jasper Power Project will be one of the largest solar PV facilities on the African continent, capable of producing enough clean, renewable electricity to power some 30,000 South African homes, as well as contributing significantly to bringing about positive social and economic transformation and sustainable development in South Africa and beyond.
The South Africa Department of Energy in May 2012 awarded a consortium — led by US solar energy project developer SolarReserve — the right to develop the Jasper Power Project.
Forming the Jasper Power Company, SolarReserve and South African partners Intikon Energy and the Kensani Group selected a consortium of companies led by Spain’s Iberdrola Engineering & Construction and its South African partner, Group Five, to build out the 96 MW solar power project, which spans some 180 hectares (~445 acres).
They, in turn, have awarded an exclusive contract to China’s Yingli Green Energy to supply all of the more than 325,000 solar modules, which will be Yingli YL295P-35b multicrystalline silcion PV modules.
Google’s Investment Criteria: Looking for Projects With Potential For Positive, Transformative Change
Google has invested more than $1 billion to develop renewable energy projects and technology in the US and Europe. What prompted Google to invest in Africa and in this renewable energy project in particular? Director of Energy & Sustainability Rick Needham explains:
When we consider investing in a renewable energy project, we focus on two key factors. First, we only pursue investments that we believe make financial sense. South Africa’s strong resources and supportive policies for renewable energy make it an attractive place to invest—which is why it had the highest growth in clean energy investment in the world last year.
Second, we look for projects that have transformative potential—that is, projects that will bolster the growth of the renewable energy industry and move the world closer to a clean energy future. The Jasper Power Project is one of those transformative opportunities.
South Africa’s Renewable Energy Drive
A shift from digging up, processing, refining, and burning coal and fossil fuels to making use of solar and other renewable energy resources would indeed be transformative in South Africa. (To be fair, the same could be said for the US, the EU, China, and the large majority of societies worldwide.)
Nonetheless, producing more in the way of carbon and greenhouse gas emissions than any other nation on the continent, South Africa has long relied on exploiting its coal deposits to generate electricity. That began to change as the role fossil fuel emissions are playing in climate change and environmental and ecological degradation began be to be better and more widely understood and appreciated, and as an international movement to transition away from fossil fuels gathered momentum.
As Needham notes in his blog post, a severe energy shortage in 2008 catalyzed the South African government to take more aggressive action. Since then, the South Africa government has been positioning itself as a leading proponent of sustainable development (see our post on the 2011 UN Climate Change conference in Durban). This includes shifting its energy base and infrastructure away from coal and fossil fuels toward solar, wind, and other renewable energy resources.
What has emerged is the Renewable Energy Independent Power Producer Program (REIPPP), a program run by the national government in which competing project developers propose and bid for renewable energy development projects via an auction process.
The REIPP provides the market-based mechanism via which South Africa aims to achieve its goal of developing 10,000 gigawatt-hours (GWh) – 3,725 megwatts (MW) – of renewable power resources by 2030. Late last October, South Africa’s DOE approved $5.4 billion worth of renewable energy projects that are slated to add 1.4 GW of new renewable power capacity to the national grid.
By way of context, electricity available for distribution totaled 18,456 GWh in December 2012, according to a Statistics South Africa report. Electricity consumption increased by some 20% in the decade ending in 2009, and it is expected to double by 2030, according to a US Energy Information Administration (EIA) report.
The Social-Ecological Co-Benefits of Solar And Other Renewable Energy Resource Development
In addition to transformation from energy and environmental perspectives, investing in the Jasper Power Project also affords Google the opportunity to contribute to positive social and economic development in South Africa.
While South Africa can boast of having the highest electrification rate in Sub-Saharan Africa (75%), only 55% of the rural population had access to electricity as of 2009, leaving some 12.5 million people without, according the EIA’s report, a key statistic when it comes to overall social development.
As Google’s Needham wrote:
Just as compelling are the economic and social benefits that the project will bring to the local community. Jasper will create approximately 300 construction and 50 permanent jobs in a region experiencing high rates of unemployment, as well as providing rural development and education programs and setting aside a portion of total project revenues—amounting to approximately $26 million over the life of the project—for enterprise and socio-economic development. We appreciate how forward-thinking the South African government has been in designing the REIPPPP to encourage these kinds of local economic benefits.
Added SolarReserve in its press release: “Yielding approximately 300 construction jobs and 50 permanent operational jobs, the project will provide rural development programs and education enhancement, as well as skills and technology transfer.”
With an annual operations and maintenance budget of ZAR 36.5 million (US$4 million, the project will also yield “significant additional indirect and induced jobs across the supply chain during the construction phase and during the 25-year plus operational period,” according to the project developers.
In addition, a percentage of project revenues totaling some ZAR 230 million (US$26 million) will be set aside over the life of the project for enterprise and socio-economic development, and “invested for the benefit of the local communities surrounding the project.”
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.