South Africa's first commercial wind-farm to contribute directly to the national power grid went on line in July 2008, operating from a Western Cape region that has the potential to become the wind powerhouse of Africa.
The Darling Wind Farm, a national demonstration project that will pave the way for more green electricity initiatives, will sell its clean power to the city of Cape Town.
Situated near the peaceful town of Darling in the Western Cape, about 70km north of Cape Town, the R75-million (US$9-million) project consists of four Siemens Wind Power turbines of 1.3MW capacity which together generate 5.2MW of environment-friendly energy. The region was chosen because it lies on the western edge of the Swartland (Afrikaans for "black country"), where ferocious winds constantly blow over the hills building up to the Cedarberg mountain range in the north.
Given South Africa's recent power crisis in late 2007 and early 2008, when national power provider Eskom struggled to keep up with demand, experts predict a boom in the renewable energy sector.
Over its projected 20-year lifespan, the Darling Wind Farm is expected to save 142 500 tons of coal and 370-million litres of water. It will also cause far less pollution than coal-burning, with carbon dioxide emissions cut by 258 100 tons, sulphur dioxide by 2 200 tons, nitric oxide by 1 100 tons, particulates by 58 tons and ash by 42 200 tons.
South Africa's abundant coal reserves have made the country dependent on coal-fired power generation – a major contributor to greenhouse gas emissions. The Darling Wind Farm is the first step away from this dependency, selling its electricity to the city of Cape Town as part of a long-term arrangement. This will help the city to achieve its target of 10 000GWh of renewable energy consumption per year by 2013 and sourcing 10% of its energy from renewable sources by 2020.
Cape Town will buy electricity from the farm and resell it to willing buyers – it cannot be passed on to customers without their consent. The city is strongly encouraging consumers and businesses to support the initiative.
Although the clean electricity only makes up 0.2% of the city's total energy demand, its financial viability will encourage the development of similar projects.
The Darling Wind Farm took 13 years to set up, with delays in the environmental impact assessment, and a desperate two-year legal battle by the developer to force the government to make its decision. The go-ahead was finally given in 2005 after a 10-year development phase. The project suffered another setback when Eskom and Darling Independent Power Producer (Darlipp) were unable to come to a power-purchase agreement, but Cape Town stepped in with an offer to buy the clean electricity.
The facility is run by black economic empowerment (BEE) company Darling Wind Power, and was developed by a consortium of leading corporations in the energy and finance sectors. These are the renewable energy parastatal Central Energy Fund (CEF), private developer Darlipp, and the Development Bank of Southern Africa.
The project received a third of its funding from the Danish government's development programme and was also awarded a grant from the United Nations Global Environmental Fund.
With a capital outlay of R70-million ($9-million), the project is owned by CEF with 49%, Darlipp with 26% and black empowerment shareholders with 25%. It forms part of the Darling Sustainable Environment and Employment Scheme, which created some 15 to 19 jobs per MW of power produced during the construction phase. A further 30 jobs were created indirectly.
Darlipp is a member of the Oelsner Group, which develops electricity generation projects using alternative sources, such as wind, wave and sun, in the Western Cape. Because of its long coastline, said Darlipp CEO Hermann Oelsner, South Africa would be able to generate more electricity from wind than it consumes – all of it clean. According to Oelsner, the West Coast has the potential to become the wind powerhouse of Africa.
"South Africa has approximately 25 years left of easily extractable coal reserves, and the supply of oil and gas will rapidly start to dwindle in the near future," said Oelsner.
The Oelsner Group was lauded internationally in 2007 by global growth consultants Frost & Sullivan, who support development of innovative strategies around the world. The company recognised the Oelsner Group for its efforts in stimulating the renewable energy market by introducing new equipment, increasing awareness of the potential of renewable energy, and for reducing the dreaded barrier of red tape, by awarding its Entrepreneurial Company prize.
"The Oelsner Group has succeeded in setting up a financially viable independent power producer (IPP) within South Africa, despite the continued monopoly of Eskom, which created conditions that do not favour IPP integration into the normal electricity generation and distribution network," said a spokesperson for Frost & Sullivan.
The spokesperson added that one of the Oelsner Group's potential renewable energy projects is Robben Island, which could become completely independent of the diesel generators it uses currently.
The National Energy Regulator of South Africa (Nersa) is developing support schemes and financial plans for renewable energy, according to Manny Singh, chair of Darling Wind Power. Singh says these schemes could enable renewable energy to play a significant role in South Africa's future energy supply.
Frost & Sullivan maintains that the renewable energy market in South Africa has yet to take off despite its huge potential, and advises companies to consider investing in the sector, especially with the ever-present threat of Eskom power cuts. "Such initiatives are expected to result in further investments, which will help to create critical mass for the renewable energy equipment market in South Africa and make it sustainable in the long term," the company said.
According to Nersa, exploitation of South Africa's ample renewable energy resources is currently not cost-competitive because of the lower cost of producing coal-fired electricity. The government's 2003 Renewable Energy White Paper identifies a two-pronged process to create a more effective environment for the use of renewable energy, by introducing financial support mechanisms, and by getting government involved in demonstrating the viability of renewable energy.
The white paper also lays out government's targets for the use of renewable energy. By 2013, final energy consumption will include 10 000GWh of renewable energy, to be obtained mainly from biomass, wind, solar and small-scale hydroelectric sources. This is approximately 4% (1 667MW) of the total projected electricity demand for 2013 (41 539MW), according to Nersa.