Developing a competitive concentrating solar power industry in South Africa: Current gaps and recommended next steps

Figures & data

Figure 1: Synthesis of selected supply-side and demand-side interventions

Figure 2: Direct solar conversion technology groups

Source: IEA (2010a).

Figure 3: Qualitative positioning for all future electricity generation types to 2030

Note: Horizontal axis represents capacity factor characteristics ranging from intermittent to peaking. Vertical axis represents localisation potential. Bubble size is approximate annual electricity production. CCGT, Combined Cycle Gas Turbine; OCGT, Open Cycle Gas Turbine.
Source: Gauché et al. (2012a).

Figure 4: Representation of installed capacity for selected renewables technologies over the 2010 to 2035 period

Source: IEA (2010c).

Figure 5: Average cost per MWh in constant US$ 2009

Note: WEO, World Energy Outlook.
Source: IEA (2010c) and Kristinsson & Rao (2007).

Table 1: Summary of key technology metrics for renewables

	Growth in installed capacity (GW), 2010 to 2035	CAGR (%), 2010 to 2035	Technology maturity	R&D expenditure (%)	Learning rates (%)	Costs gap
Hydro	655	2	Mature	1	1	Lower cost gap
Wind
Wind	880	9	Onshore (mature), offshore (developing)	16	7	Lower cost gap
Geothermal	29	5	Mature	4	5	Lower cost gap
Solar PV	387	12	Developing	} 53	17	High cost gap
CSP	88.6	18	Developing		10	High-cost gap
Marine	16.9	9	Birth stage	4	14	High-cost gap

Figure 6: Planned CSP projects worldwide

Note: MENA, Middle East and North Africa.
Source: Deutsche Bank (2009).

Table 2: Summary of key renewable energy policy principles adapted from IEA (2008)

Principle	Key actions and description
Economic and non-economic barriers	Identify key non-economic barriers to industry development, creating a more predictable stable environment that may contribute to technology development and decreasing cost
Demand-side measures	Develop and implement incentives in order to stimulate demand for technologies and their implementation based on technology maturity
	Design a predictable and transparent support framework in order to attract investments
Supply-side incentives	Transitional incentive to decrease over time but to stimulate technological innovation and the development of technologies towards maturation
Impact assessment	Ensure that the impact of large-scale penetration of renewables is clearly analysed and what impact it may have on the system

Figure 7: Technology lifecycle and technology development levels as outlined in IEA (2008)

Note: CCS, Carbon Capture and Storage.

Figure 8: Industrial development policy framework for analysing potential policy gaps

Figure 9: CSP research and potential manufacturing capabilities in South Africa

Note: HTF, Heat Transfer Fluid; IP, Intellectual Property.
Source: DoE (2009).

Table 3: Identified supply-side policy gaps and suggestions

Supply-side initiative	Identified gaps and suggestions
R&D stimulus	Very limited funding is directed towards CSP-oriented R&D at universities and the Council for Scientific and Industrial Research (CSIR); currently one and a half million Rand is provided through a National Research Foundation grant to Stellenbosch University, and the CSIR directs a similar amount of its Parliamentary Grant to CSP-related activities
	The R&D grants instruments need to be aligned with the interests of industry; Sasol, Eskom, and other international technology providers have indicated specific CSP-related R&D needs with the possibility of co-funding the R&D needs
Production incentives	12i Production Incentives is a tax incentive supported by the DTI and provides support to Greenfield and Brownfield investment projects (DTI, 2011)
	Considerable funding is available but with rather stringent requirements; for example, developments need to be located in an industrial development zone (IDZ). The planned solar parks will have the characteristics of an IDZ, but these parks are still in the planning stages (DTI, 2011)
Technology demonstration programme	A well-designed and managed (new) technology demonstration programme over an extended period needs to be developed; in the order of half a billion Rand will be required for such an effort
	This programme must be geared towards technological learning for experimentation towards cost reductions
	The chosen sites for CSP plants, as part of the Renewable Energy Independent Power Producer Procurement Programme, can be used effectively for this purpose
Technology transfer programmes	Considerable know-how and skills will need to be developed and successfully transferred, by attracting multi-nationals that have the intellectual property, through phases of industrial scale-up and rollout
Skills development	Over the medium term to long term, university and further education and training college curricula will need to be designed to meet the needs of industry in terms of operating and maintenance skills; the Department of Education is considering investing in the order of 80 million Rand to establish a South African Renewable Energy Training Centre at the Cape Peninsula University of Technology

Figure 10: Representation of policy-adjusted IRP capacity analysis

Note: CCGT, Combined Cycle Gas Turbine; OCGT, Open Cycle Gas Turbine.
Source: DoE (2011).

Table 4: Identified demand-side policy gaps and suggestions

Demand-side initiative	Identified gaps and suggestions
Renewable Energy Independent Power Producer Procurement Programme (previously REFIT)	South Africa is one of the only countries that have successfully implemented such a large programme
	Adjustments will be required as the programme is rolled out to address shortcomings; for example, the difficulties to reach financial closure as are currently being experienced
IRP	The IRP has been criticised to take a least-cost technology approach rather than a portfolio approach
	Low CSP plans may not be enough to support a local industry with only 100 MW capacity added per year; more aggressive targets need to be set in an updated IRP
Solar Parks	A pre-feasibility study has yet to be published to undertake a centralised 5 GW development over the next 20 years
	Key infrastructure requirements will need to be considered to support such facilities; for example, the grid will need to be expanded and upgraded and the water requirements of CSP plants in such a park will have to be addressed
SARi	The South African Renewable initiative, launched at COP17, is designed to unlock international public and private finance for a defined period, but the positioning of SARi, in the Department of Energy, is deemed inappropriate; a cross-departmental mechanism, possibly in National Treasury, needs to be maintained
Industrial policy	South Africa should be careful to impose strict local content procurement requirements for project developers, which is not against WTO regulations because South Africa is not a signatory to the regulations, as CSP developers already are faced with many risks and high costs; local content should be steadily increased over the IRP period

Figure 11: Synthesis of suggested measures along the industry lifecycle for the development of a South African CSP industry

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