South Africa has plenty of energy available. The problem is, it does not have enough power. Some of the country’s biggest businesses have been queuing up to sell power to Eskom( Electricity Supply Commission). The potential power on the table--all 5,000MW of it--is almost equivalent to two Koeberg-sized nuclear power stations, Mg.co.za.
To put this into context, the rolling load-shedding that has been causing so much distress to so many results from power shortages of about 3,000MW.
If you scratch the energy sector, speaking to players large and small, a picture emerges of any number of players who are keen to supply energy to Eskom from sources as diverse as hydro, diesel generators, biogas, biomass, wood and solar.
The problem, they say, is that monopolist Eskom is prepared to pay only half of what it charges for electricity.
Investors say they also need certainty. They could build capacity now at relatively high cost only to find Eskom refusing to purchase their power when the crisis eases.
These alternative sources are generally more costly than coal-fired power, but many are kinder to the environment. Another advantage is that it would be relatively quick to construct the necessary infrastructure, unlike the 10 years it takes to construct a large power station.
Much of this alternative electricity is being produced anyway, as part of industrial processes as diverse as sewage processing, sugar refining and paper-making.
It appears that much of this electricity could have been fed into the national grid by now, but this has been held up by red tape, price disputes and reluctance to sign on new providers.
Large projects involving hundreds of megawatts of electricity are under discussion.
There is also scope for relatively small-scale renewable energy projects to make a dramatic contribution to the grid. Government has been working on an approach intended to encourage small users of clean energy to supply the grid. As is the case in a host of countries internationally, suppliers of green energy are paid a special feed-in tariff (FIT) to encourage the development of new, cleaner forms of energy.
One source says about 5,000MW could be generated through the use of FITs.
There were hopes that a new dispensation to encourage FIT’s would be announced early this year and that it would contribute towards diversifying energy supply from Eskom’s clutches but, the source says, the process remains in a muddle somewhere between the regulator and Eskom head office, with signs that the provision of renewable energy may also be controlled and monopolized by Eskom.
Legally, electricity producers may only sell to Eskom or to municipalities distributing electricity.
The relatively large projects under discussion are known as co-ðgeneration. This power comes from a range of sources. Tongaat-Hulett and Illovo produce electricity from sugar bagasse, for example, while four of Sappi’s eight mills produce electricity. Methane can be collected from sewerage works, and small businesses can run diesel generators. Pooling all of these sources could potentially save the cost of a new power station.
Co-generation has been discussed for the past few years, with little progress. The sticking point until now has been the price. Although much secrecy surrounds the proposed pricing for co-generated power, the price has been based on the avoided cost to Eskom of generating coal-fired electricity. Because Eskom produced the cheapest electricity in the world, and had not invested in new stations until now, there was not much scope for private sector production, said Frost analyst Cornelis van der Waal.
But steep increases have been granted for this year and Eskom is making new investments.
But electricity regulator Thembani Bukula of Nersa says that prices agreed on for co-generation would also take into account the cost of production. The tariff Eskom is allowed to charge its consumers also includes a “reasonable return“, which is currently 8 percent, but Bukula says co-generators would be granted a higher return. At present, he said, the price of co-generation “does not look prohibitive“.
FITs, which are associated with renewable energy, are still under discussion.
Bianca Belinska, from Nersa, confirmed that the regulator is considering Eskom’s proposal whereby 50 percent of the renewable energy required by the country would be supplied by Eskom, and the remaining 50 percent would be bought from independent producers by Eskom. South Africa needs to source 10,000 gigawatt hours of electricity from renewable sources by 2013. Currently, this is being modeled on a mix of wind and concentrated solar power, she said. She said discussions were continuing between government, the regulator and Eskom on these issues and all proposals were being considered.
Electricity from co-generation projects could be added to the national grid in 2009, said Bukula, and Eskom is expecting to tie up agreements by June. So far, just one agreement has been signed, with Sasol.
An incentive program for solar water heaters could significantly reduce demand, as the equivalent of a large power station (2,000MW) is used to provide hot water to the domestic sector alone. Once the effects of co-generation, renewable power and reduced demand through solar heaters are pooled, there should be no power crisis.

China accounts for only about one percent of the world's photovoltaic production capacity, which suggests that photovoltaic industrial development prospects are bright.

China’s Information Office of the State Council issued the country’s first ever white paper on energy conditions and policies in late December, calling for an energy strategy centered on energy conservation, environmental protection, and increased international cooperation.
“We welcome more foreign investment in the energy sector,“ said Chinese Commerce Minister Bo Xilai at the first China International Coal and Energy New Industry Expo.
“Foreign companies that own clean coal technologies and work with their Chinese counterparts to tap China’s coal reserves, one of the world’s largest, may get good returns as China is seeking to reduce the greenhouse gas emissions and ease its increasing thirst for oil,“ Bo added.
Several major foreign companies, including Royal Dutch Shell Plc, South Africa-based Sasol Ltd., General Electric, ABB Group and Siemens AG, have already begun working with Chinese companies to produce electricity and substitutes for crude oil derivatives from coal, according to the Chinese Commerce Department, Emerging-china.com reported.
“These big players are contributing to China’s the transition from ’black energy’ to ’green energy’, and make healthy profits as a result,“ said Angang Hu, a professor of public policy and Management at Tsinghua University and director of the influential policy thinktank, the Center for China Studies.
Hu said that China’s rise is a reality, but now a green development strategy is the only way forward. Hu believed it is imperative to make full use of both domestic and international energy, technology and markets by increasing the import of energy, especially clean energy, energy-efficient technology and environmental protection technology.
“As early as in 1994 and1995, external agencies began to take an interest in China’s energy sector,“ Nengzi Shi, Deloitte vice president, said in a recent report. “They are especially keen on the investment in power plants, and foreign investors are now beginning to look into new sources of energy, including liquefied natural gas(, liquefied petroleum gas, and are seeking a number of substantive cooperation, including cross-border acquisitions.“
So far foreign investors have set foot in the exploitation of coal, natural gas, hydropower, solar energy, wind energy, tidal wave energy and other new forms of energy.
Foreign-owned or Hong Kong-based gas companies such as Shell and Towngas have entered into China’s city gas industry through joint ventures or mergers and acquisition.
Shell has found all its core businesses represented in China: exploration and production, gas and power, downstream--including oil products and chemicals-- and renewable energy. On December 27, 2007, Shell China acquired a 55 percent equity interest in a coal bed methane venture in Shanxi province and will take over as operator.
“This is Shell’s third upstream PSC [Petroleum Sharing Contract] venture in China. We are confident that our upstream technologies and expertise can help unlock the vast potential of coalbed methane in the country,“ Lim Haw-Kuang, Executive Chairman of Shell China said in a statement.
Shi added that the relaxation on energy policy can also mean more chances for China’s second- and third-tier cities like Xinjiang and Chongqing, which are geographically more remote but rich in natural resources such as natural gas.
Renewable energy projects are particularly favored both by Chinese government and foreign investors.
Data from the China Energy Department shows that China abounds in solar energy in western provinces like Tibet, Yunan and Xinjiang--but, at the same time, there are still nearly 60 million people without electricity. China accounts for only about 1 percent of the world’s photovoltaic production capacity, which suggests that photovoltaic industrial development prospects are bright.
Trina Solar, a photovoltaic industry giant located in Changzhou, in Jiangsu province, is backed by a number of known investors such as Good Energies, Milestone Capital and Merrill Lynch. The solar industry has great potential and is growing fast in the Chinese market, according to Jifan Gao, CEO of Trina Solar.
“The Chinese government will improve the relevant policies and regulations for enterprises and the establishment of standardized investment projects, to stimulate the introduction of advanced technology,“ Xiaoxing Zhang, vice chairman of Changzhou International Investment Promotion Committee of Jiangsu, told Emerging China.
“Local governments will offer preferential taxation policies to wholly-foreign-owned companies involved in energy exploitation and production,“ Zhang added.

With a tipping point in climate change maybe a few years out, perhaps triggered by the soon completely melted summertime Arctic ice cap, we’re probably well past the point where a semi-market-based-only approach to cutting greenhouse gas emissions, like cap-and-trade, will do any good. Government needs to step in.
Among the measures that can be done now is to continue to build emission free renewables while dramatically cutting back on power consumption, so that new fossil power plants don’t need to be built until carbon sequestration technology can be implemented. There needs to be some political leadership to put direction in the climate saving effort, Green-energy-news.com reported.
Fortunately, globally, renewables as well as efficient energy have built up a considerable head of steam. Concerns over oil supplies, concerns over global warming, and in many places government mandate and government assistance for green energy have been driving the industry forward, gaining traction and momentum for a number of years now. The green energy sector has been hot, creating jobs, new business opportunities, new wealth, improved technologies and new inventions all while helping to cut greenhouse gas emissions.
But, a global recession could throw the whole industry off track. The industry needs constant investment and, to keep costs competitive, some help from government.
If demand drops in a recession investment won’t be as appealing because of a slow financial return. Long term government support of renewables and efficient energy technologies would give investors confidence that the sector is here to stay and worth investing in.
A joint statement of the National Hydropower Association, Geothermal Energy Association, Solar Energy Industries Association, American Wind Energy Association says this about the economy and the industries they represent:
“As leaders of four major renewable energy trade associations, we respectfully urge bipartisan congressional leadership and the president to work together to include renewable energy tax provisions in any economic stimulus legislation currently being developed.“
2007 was a record year for renewable energy in the US. Almost 6,000 megawatts of new renewable energy came on line in 2007, infusing over $20 billion of investment into our economy. And along with this investment came jobs. In 2007, the renewable energy industries put Americans back to work, creating tens of thousands of high quality jobs in all 50 states. Jobs like electricians and plumbers, line workers, roofers, engineers, and high-paying manufacturing jobs. These jobs are the backbone of our economy in the US.
“But already these jobs and many more are at risk. The 2007 energy bill was passed in December with much fanfare, but without an extension of the renewable energy tax credits. Already we are seeing sales and new project announcements drop off. Large scale solar and wind projects take longer than a year to site, permit and construct. And with only 11 months to go before the credits expire, these projects have started drying up. Even larger concentrating solar, geothermal and hydro projects take many years to construct and will not get built without a long-term extension of the tax credits. If the renewable energy tax credits are allowed to expire, we will lose hundreds of thousands of jobs here in the US.“
A renewal of the tax credits would help as well as a new round of tax breaks for everything from heating and cooling equipment to hybrid cars. Green energy, its industry, climate change and the economy are already connected, but the connection has to go deeper and be made a public issue. The presidential candidates could help in this regard.
There are job opportunities everywhere in the sector from brave souls that climb to the top of wind turbines to keep them maintained, to consultants who offer wise advice on how to save kilowatts, to marketing professionals that make sure consumers are aware of the latest products, to assembly line workers who put together solar panels.
And, of course for the most savvy in the business, there are profits to be made.
Washington, don’t let this industry fall apart. It’s good for the economy. It’s good for the planet. Support it. Embrace it.