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Solarcentury: Energy now a top business concern

Solarcentury: Energy now a top business concern

Jan 13, 2015

The most logical solution to South Africa’s energy crisis is to diversify its energy mix by encouraging the development of renewable energies that harness the country’s natural resources, such as the sun.

This is according to industry leaders who took part in a recent Solarcentury-hosted roundtable looking at the state of commercial solar power in South Africa and the opportunity for solar to support economic growth. Participants included Gareth Warner, MD of Solarcentury in South Africa; Gareth Gregory, Alternative Energy | Energy Modelling and Planning Leader at Deloitte; Hugh Fraser, Media Manager at Paragon Architects; Werner van Antwerpen, Head of Sustainability and Utilities at Growthpoint Properties; and representatives from technology, property and energy media.

Energy takes seat at boardroom table
South African power utility Eskom has implemented load shedding three times this year and the country now faces load shedding on a scale similar to the power crisis of 2008. A collapsed coal silo and depleting water reserves forced Eskom to implement stage 2 load shedding over the weekend of 22 November and to declare a power emergency with large industrial customers. The South African Chamber of Commerce and

Industry (SACCI) has raised concerns about the effect of load shedding on economic productivity, which cost $50 billion (R550 billion) during the 2008 crisis. One way to mitigate this risk is to build more power stations but this requires money. The easiest way for the government to raise the funding required is to increase electricity prices further, though they have already increased by more than 300% since 2007.

According to Gregory, energy was never on the business agenda when coal-generated electricity was cheap and plentiful. In 2007, businesses were used to paying low energy tariffs – among the lowest in the world. Fast forward just seven years: South Africa’s tariffs are now gaining momentum and will continue to increase. Compound this with the impending carbon tax and businesses are starting to feel the strain as the cost of energy becomes a sizeable chunk of business expenses.

This is why empowering businesses through education programmes about their energy maturity and sources of energy (the mix) they can choose is so crucial, said Gregory. Companies like Solarcentury can help businesses become more sustainable – financially and environmentally – and encourage them to re-evaluate their power supply, looking beyond coal to more renewable energy sources – bearing in mind the mix is ultimately going to drive sustainability and not a single technology.

Part of the problem is that solar is still perceived as expensive and few businesses are taking the long-term view of their energy needs that will enable them to understand that solar is actually an effective savings model in a broader mix. After the initial outlay for the cost of the system, energy is free and can meet all daytime energy needs. Gregory believes that the issue often lies in the fact that businesses too often base their decisions on historical data rather than making energy choices with the future in mind.

Balanced design
According to Warner, solar PV system prices have steadily reduced over the last five years and have stabilised at a relatively low cost base. This means architects can now cost effectively incorporate solar PV into the design of commercial buildings.

However, the trend in architecture, says Fraser, is that buildings need to “look how they function”. For example, a building that aims to maximise natural light will have many windows and skylights. This is counter-intuitive for businesses wanting a ‘green’ building as more light means more heat, which ramps up the air conditioning needed to keep the building cool. Skylights also take up roof space that could otherwise be used for solar panels. For Fraser, it all comes down to finding the right balance as nothing can be regarded in isolation when it comes to building design.

Van Antwerpen says the decision to install solar is often driven by the tariff structures implemented by the respected councils. Solar helps to reduce the amount of fossil grid energy consumed, thereby lowering operational costs – and of course this is good news for tenants as it means lower bills for them too. Solar also helps buildings achieve higher Green Star ratings and the reduced carbon emissions exempts them from paying carbon tax due for implementation in 2016.

Existing buildings represent a greater opportunity for installing solar than new buildings as there is a lot of unused roof space on South African commercial buildings, said Van Antwerpen. By installing solar panels, buildings improve their Green Star rating scores, as solar decreases fossil energy consumption and therefore lowers carbon emissions.

What’s stopping us?
The commercial concept of solar is still relatively new in South Africa, so work is needed to raise awareness around the benefits – especially that solar is a sound financial investment.

The roundtable participants agreed that more needs to be done at policy level to open up the renewables market and remove restrictions, such as those affecting applications for generation licences. The government needs to finalise issues around feed-in tariffs, such as pre-qualification criteria, the licensing process and timelines, so that private producers can start feeding energy back into the grid, which will relieve the pressure on South Africa’s ageing coal power stations.

Participants also agreed that while solar definitely has a role to play in South Africa’s overall energy mix, it is not without its own challenges such as the inability to produce power at night. Batteries can be used to store excess electricity but are still cost prohibitive for mass market adoption and have an approximate 10-year lifespan compared to the 20- to 30-year lifespan of rooftop solar PV systems.

South Africa needs a new energy mix that harnesses all its energy options, the participants agreed. Strides made by the private sector are only acknowledged on a project-by-project basis rather than, for example, the benefits of multiple solar projects such as how this reduces the demand for fossil grid energy. More clarity is needed on how the private sector can become energy generators. This, together with the cooperation of government, will support the uptake of solar among commercial properties.

The realities of South Africa’s energy situation were laid bare at a government-hosted climate change summit earlier this month. South Africa has built one of the most fossil fuel-intensive economies in the world and has made very little investment in renewable energy. Speakers at the summit said it was time to think differently about energy in South Africa, asserting that we should be planning to run on renewables and not treat them as a ‘token thought’ in the energy mix. The consensus at the summit, and at the Solarcentury-hosted roundtable, was that the sooner bureaucracy is cut, the sooner we can move ahead and realise a greener and more sustainable South Africa.

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