About 90% of renewable energy jobs are generated during the construction phase. This is a period of between 12 – 24 months. This is one of the challenges facing the transition as South Africa journeys towarda net zero, according to Head of Stakeholder Relations, ESG & Sustainability Sasol Limited, Dr Stanley Semelane.
He was speaking at the Graduate Business Schools energy transition series titled “A tale of two hemispheres.”
Two charts from Johannesburg-based Gaylor Montmasson-Clair, a Senior Economist at Trade, Industrial Policy Strategies (TIPS), show solar panels imported cost South Africa R3.6 billion ($200 million) in the first quarter of 2023. This is three times as more than it was in 2022 at R5.6 billion ($354 million).
Because solar panels go hand in hand with inverters, their imports were at R10.5 billion ($650 million) in 2022, an increase from $350 million, in 2021.
Lithium-ion cells and batteries imported in 2022 for homes, cost over R12 billion South African Rand. (Cleantechnica).
Daniel Zinman, senior transactor in the renewable energy space at Rand Merchant Bank (RMB), points out that the cost of solar PV is decreasing.
“By 2030, about 6.5% of the total grid will come from Solar PV and 18% from wind. The renewable price point is coming down, for example, the price for Solar PV in 2011 compared to the price in 2018, is down by about 75%.”
Globally, the cost of debt of renewable electric utilities is at 6%, compared to 6.7% for fossil fuel electric utilities. Similarly, utilities focused on renewables have a cost of equity (15.2%) lower than those relying on fossil fuel (16.4%), according to the Smiths School (Oxford).
How much does renewable energy cost in SA? The average cost of renewable energy projects in Bid Window 5 is R0. 473 per kilowatt-hour.
The global weighted average levelised cost of electricity (LCOE) of new onshore wind projects added in 2021 fell by 15%, year‑on‑year, to USD 0.033/kWh, while that of new utility-scale solar PV fell by 13% year-on-year to USD 0.048/kWh and that of offshore wind declined 13% to USD 0.075/kWh.IRENA (2022)
Wind projects around the world are consistently delivering electricity for US $0.05 to US $0.09/kWh without financial support.
Could the production costs come down substantially if material for renewable energy were to be manufactured locally? Could jobs be more sustainable than the current 24 months?