Whether it is to keep your own farm powered or to sell back to Eskom, it’s no time to wait around while the rest of the country invests in alternative energy. But it’s also no time to let your guard down on opportunists who just want to make a quick buck out of you.
A word of warning comes from Chris Schutte, director of Sonfin, an independent company that specialises in structuring green power plants for farmers across the country.
Following President Cyril Ramaphosa’s announcement this week that South Africa will expand its reliance on private energy generators, he believes the door is open to opportunistic equipment suppliers and installers who don’t have the know-how to help farmers make a sound investment.
“I would like to warn everybody who wants to buy solar systems that they must make 100% sure that they buy systems from companies that are approved by the commercial banks [who provide financing].
“Every second person is now going to become a solar expert and would like to make a quick buck out of you. So, please check with your bank to make sure about the company you want to use.”
Schutte says many farmers are ready to install or to sell back electricity to Eskom. “They have been waiting for this for a very long time because they have the capacity to do it and they have the space available.
“I would advise farmers to jump quickly, but Eskom must first get its processes in place on how they are going to connect this flood of private renewables to the grid,” he says.
He adds that Eskom also still needs to determine the price it is willing to pay for electricity from private companies. This is in agreement with Logical Waste director and biogas industry expert Jason Gifford, who told Food For Mzansi yesterday that there are no details yet around pricing structures and access to the grid.
Careful calculations on viability
Gifford says it is crucial for farmers to have a complete understanding of their farm’s requirements, generation potential and all associated costs before they go ahead with an alternative energy project.
“Costs such as grid connection fees and grid studies may prove to make the project unviable.”
“External costs such as mentioned above should, in my view, be waived from small-scale projects. An exemption [could even be] provided to farms where the installed capacity is less than 500 kW,” he says.
Both experts also caution that new energy projects will not be completed overnight and might not be without hiccups. “Available stock will become a problem,” says Schutte. “It’s already a problem, so we must plan in time to get the stock levels up.”
“South Africa’s demand compared to the worldwide demand is so small, I doubt that we will make a dent on the global market,” adds Gifford. “But equipment shortages, manufacturing delays and international freight will impact a project development time, and this must be considered when developing a project.”
He believes finding suppliers of locally produced equipment could help speed up alternative energy installations.
Schutte says registration for low-voltage projects with the National Energy Regulator of South Africa (Nersa) could take six months, while a medium-voltage project is likely to take 12 to 18 months.
Still, Gifford believes farmers should go ahead right away and make use of their existing infrastructure and biomass to improve the energy security and economics of their businesses.
“If the farm has greater economic impact, which will lead to jobs being saved and a greater contribution to the fiscus, then that is something to think about and ultimately do.”
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