Solar energy to undercut coal in South Africa: Frost & Sullivan

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Electricity from solar power could be the cheapest in South Africa by 2020, according to a new report by Frost & Sullivan.

The study, commissioned by the South Africa Photovoltaic Industry Association (SAPVIA), found that state utility Eskom will be selling coal-fired electricity for R1.69/kWh (US$0.171/kWh) by 2020.

As the country continues to commission more PV, the cost of electricity from solar could fall as low as R0.74-1.26/kWh (US$0.075-US$0.127/kWh).

“That’s the pricing where we expect to hit grid parity, that could happen around 2018,” Davin Chown, president of SAPVIA and director at Genesis Eco-Energy and Mainstream South Africa told PV Tech.

The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is targeting 1.45GW of solar PV. The third round of projects will be announced on 29 October.

“The round three REIPPPP figures have not been released yet; it could be good to see in two weeks time what comes out of that process. There has been a very rapid degression from round one where solar projects average around R2.65/kWh (US$0.268) to round two when the average was about R1.65/kWh (US$0.167).

“Some of our projections for 2013/14 were about R1.20/kWh, lets see how accurate we are,” he added. “The technology costs have dropped considerably and we need to see what the impact is going to be in the market”

Despite the falling cost of solar power, Chown warned that letting cost dominate the development of solar in South Africa created its own risks.

“We need to ask what kind of market, what kind of industry we want in South Africa. From a pricing point of view the question is how far down should we be pushing them. The renewables programme is not just about lowering the cost, there are other benefits too. Local content, local ownership, manufacturing capacity, job creation and the benefits for local economic development. So there are a number of other softer objectives for solar to achieve and we are getting there.

“The question is if we do get to that R0.76/kWh, should we be going any lower? It’s a new industry and given the volatility in emerging markets, could we run the risk of pushing prices so low there is no margin for the system to absorb other knocks.

“It’s going to become a build and hold market, it will attract players for the long term.”

“If we can get down to the R0.90/kWh (US$0.091) level those are really sensible numbers; the era of cheap power in South Africa has gone.”

Eskom has been criticised for building huge new coal generation capacity, which it argues is necessary to cope with increasing demand in South Africa.

Chown said the utility had been “quite receptive” to renewables but needed to shift away from its reliance on big, centralised, base-load power stations.

“The risk in the system has not been accurately priced; if one of these big plants goes down a big chunk of the network goes. The consequences for South African business when this happened in 2008 were absolutely staggering.

“We need more diversified generation. Eskom needs to make that shift. So far Eskom has helped a huge amount to make sure projects get connected to the grid on time. It’s in their interest that they do so,” he said.

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
29 July 2021
This free webinar will explore the ongoing opportunities in the UK solar PV market, looking at global technology trends and how they apply to the UK. Join us for an overview of the project pipeline and forecast for deployment over the coming years. We'll be looking at the types of modules available and being used in the UK and presenting a case study on the deployment of bifacial modules in this market.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?

Read Next

July 27, 2021
More than 140 business leaders have urged the US Congress to pass President Joe Biden’s bipartisan infrastructure bill, telling lawmakers that the bill is “desperately needed” to renew the nation’s infrastructure
July 27, 2021
A round-up of the latest news from the US solar market, featuring Vision Solar’s commitment to hire “hundreds” of sales staff as part of a two-state expansion, Recurrent Energy’s sale of two major assets in Texas and news of 8minute Solar Energy strengthening its legal team.
July 27, 2021
Tesla reported retrofit solar installations of 85MW in Q2 2021, cementing its recovery from a worst-ever performance in the corresponding period last year.
July 26, 2021
A solar-wind-energy storage hybrid project is to power a Madagascan mine after Rio Tinto signed a power purchase agreement with independent power producer CrossBoundary Energy.
July 26, 2021
The pace of climate action in the US is “wholly unacceptable”, according to the director of the US Department of Energy’s (DOE) Loan Programme Office
July 26, 2021
Support for distributed energy resources (DERs) like rooftop solar, community solar and battery storage could save Californian ratepayers US$120 billion over the next 30 years, according to a new report

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
July 29, 2021
Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021