South Africa To Produce 10,000 Gigawatt-Hours of Wind & Solar Energy Using Feed-In Tariffs

South Africa's National Energy Regulator (NERSA) in late March 2009 introduced a system of Feed-in Tariffs (FITs) intended to produce 10 (ten) Terawatt-hours (TWh) = 10,000 (ten thousand) Gigawatt-hours (GWh) of electricity generated from wind, solar, small hydro, and landfill gas for the country by 2013.

"Feed-In Tariffs - Boosting Energy For Our Future" Report Front Cover, World Future Council, Hamburg, Germany, 2008.

Feed-In Tariffs For South Africa:

A March 31, 2009 Media Announcement briefs the NERSA Decision on Renewable Energy Feed-In Tariff (REFIT).

The 40-page report, South Africa Renewable Energy Feed-In Tariff (REFIT) - Regulatory Guidelines 26 March, 2009, states in its introduction:

"Grid connected renewable energy is currently the fastest growing sector in the global energy market. Installed global wind capacity at the start of 2008 is in the order of 90GW, with total world installed capacity having doubled since 2004. India, China, the United States, Spain and Germany together added over 20GW of wind power in 2007. China and India each are currently installing wind electricity in excess of 1GW per annum and both have targets of achieving over 10GW by 2015. The capacity of grid connected solar PV has also quadrupled from an installed capacity of 2GW in 2004 to approaching 8GW at the end of 2007. Commercial-scale solar thermal power plants are also under construction in countries such as the US and Spain. Targets for the promotion of renewable energy now exist in more than 58 countries, of which 13 are developing countries."

'The renewable energy industry is now a major economic player, with the industry employing over 2.5 million people worldwide. Renewable energy companies have grown significantly in size in recent years, with the market capitalisation of publicly traded renewables companies doubling from $50 billion to $100 billion in just two years (2005-7)."

"South Africa has a high level of renewable energy potential and presently has in place targets of 10,000 GWh of renewable energy by 2013. To contribute towards this target and towards socio-economic and environmentally sustainable growth, and kick start and stimulate the renewable energy industry in South Africa, there is a need to establish an appropriate market mechanism."

"Feed-in Tariffs (FIT) are, in essence, guaranteed prices for electricity supply rather than conventional consumer tariffs. The basic economic principle underpinning the FITs is the establishment of a tariff (price) that covers the cost of generation plus a "reasonable profit" to induce developers to invest. This is quite similar to the concept of cost recovery used in utility rate regulation based on the costs of capital."

"Under this approach it becomes economically appropriate to award different tariffs for different technologies. The price for the electricity produced should be set at a level and for a period that provides a reasonable return on investment for a specific technology. The tariff should also be certain and long term enough to allow for project financing to be raised by the project."

"Feed-in tariffs to promote renewable energy have now been adopted in over 36 countries around the world, including Spain and Germany and a number of states in the US, and also including developing nations such as Turkey, Thailand, Sri Lanka, Nicaragua, Indonesia, Ecuador, China, Brazil, Argentina and most recently Kenya."

"The establishment of the Renewable Energy Feed-In Tariff (REFIT) in South Africa will provide an excellent opportunity for South Africa to increase the deployment of renewable energy in the country and contribute towards the sustained growth of the sector in the country, the region and internationally."






"Feed-In Tariffs - Boosting Energy For Our Future" Report Back Cover, World Future Council, Hamburg, Germany, 2008.