CASE STUDY

!Khi Solar One

Once completed, this concentrated solar tower power station will be one of the largest in the world. One of the benefits of this project relative to most other renewable energy projects is its ability to store energy and to deliver electricity to the grid during peak times.

Natural environment

Industry impacts

The IDC remains committed to South Africa’s goal of transitioning towards a green economy. Through the Green Industries SBU, the IDC has successfully participated in the first two bidding rounds of the Department of Energy’s Renewable Energy procurement programme, with 18 projects awarded preferred bidder status and a potential exposure ca R7.7bn. These projects will have a total installed capacity of 825MW of the 2 460MW allocated during Rounds 1 and 2 and will generate more than 7 000 permanent construction jobs mainly in rural areas, such as the Northern Cape.

All the projects have obtained environmental approvals, and environmental management plans are being implemented to monitor compliance throughout construction and operational phases. The projects that have been approved so far include wind generation, photovoltaic and concentrated solar power as well as hydro power.

All of these technologies produce electricity with zero CO2 during its 20-year lifetime and are expected to avoid CO2 emissions as indicated in the table below:
Technology   MW Installed   Expected  
MWh  
over  
20 years
  
Expected  
Ton CO2 emission to be avoided
  
Photovoltaic   213   9 152 380   8 346 970  
Concentrated Solar   150   14 793 777   13 491 925  
Hydro   10   1 438 000   1 311 456  
Wind   452   28 396 439   25 897 553  
Total   825   53 780 596   49 047 904  

The financing of energy efficient and renewable energy investments through the R500 million Green Energy Efficiency Fund (GEEF), further demonstrates IDC’s commitment to greening the country. This has a dual benefit of assisting industry to be competitive in a high energy and labour cost era while impacting positively on the natural environment, as these projects will result in carbon emission reductions.

Since the launch of the fund in October 2011, 17 projects have been approved with a total commitment of R175.12 million (circa 35%). The investments include mass rollout of energy efficient lighting and showerheads, solar water heaters, rooftop Photovoltaic (PV), cogeneration, and biogas to energy, energy efficient refrigeration and industrial energy efficiency. Annual energy savings achieved through the investments amount to 387 MWh/yr with an additional carbon reduction of 383tCO2/yr.

As part of the implementation of GEEF, 25 walk-through energy audits and four detailed (investment grade) energy audits have been provided to new and existing IDC clients. This is to encourage the efficient use of energy as well as the transition away from fossil fuel-based energy by industry.

A new R400 million credit line was established in June 2012 with the French Development Agency. The credit line will focus on the financing of small-scale renewable energy sold under a Power Purchase Agreement (PPA) as well as Greenfields energy efficiency projects for the manufacturing sector. It is envisaged that investments under this facility will result in further positive environmental impact, thus contributing to South Africa’s goal of reducing carbon emissions by 34% from business-as-usual levels by 2020, and by 42% by 2025.

Funding of two combined heat and power projects for industrial users is expected to reduce carbon emissions by 60 000t CO2/yr through their greater efficiency. A number of cogeneration projects are at an advanced stage of development, where investment decisions are awaiting clarity from the single buyer, or in the case of own use on site, approval of integrated demand management support. These are green projects with good base-load characteristics and will contribute to reduced power costs to the South African economy, so the current prioritisation by Eskom and the DoE can catalyse these investments.

Provision of green energy to the transport sector in South Africa has significant potential for reducing greenhouse gas emissions, and IDC is playing a leading role in development of bio-ethanol as a petrol blend component, through the Cradock grain sorghum project, and of cleaned and compressed biogas as fuel for fleets, such as taxis and municipal bus fleets.

IDC is supporting the development of clean biomass stoves for lower-income households, and such interventions have potential to reduce the current excessive health costs, due to factors such as poor indoor air quality and shack fires. In the current year 5 000 stoves that reduce carbon emissions by more than two times the traditional methods (mbawula), have been placed in the market. These also have the potential to significantly reduce peak electricity demand, but face an affordability challenge as they compete against supported free basic electricity.

Solid waste, largely lying at municipalities, that can be handled more sustainably through minimisation, recycling and conversion to energy, is a focus area for funding, but projects are difficult to unlock and enable funding for. IDC is contributing to project development for waste to energy with the City of Johannesburg and a private sector waste company. A recycling operation has been funded that recovers more than 30% of waste, hence reducing energy required to produce the glass, plastic, paper and metal products. The approach is semi-automated to be job-intensive. Further such developments are being supported.

A new development area that has the potential to significantly support demand for platinum group metals, of which South Africa has more than 80% of global reserves, is use of clean power fuel cells, which convert hydrogen into water. Currently niche projects, such as replacement of high-cost small diesel generators are being developed with industrial partners.

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.


APPROVALS
R13.1 billion
DISBURSEMENTS
R16.0 billion
JOBS FACILITATED
18 922
JOBS SAVED
3 950
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