SA Makes Top 25 Investment Destinations

In the ranking of most attractive countries for investment in renewable energy generation for 2009, the first African nation has appeared on Ernst & Young’s list. South Africa, ranked 22, made the list with help from its renewable energy feed-in tariff (Refit) that was put into effect in March 2009. The Refit will “guarantee a stable rate-of-return to independent power producers covering four RE technologies: wind, concentrated solar power, landfill gas, and small hydropower.”

 

The report said, “This incentive yielded positive responses as South Africa’s Department of Minerals and Energy said it had received more than 100 renewable energy proposals that could add up to 5,000 MW (equivalent to six coal power plants) to the country’s energy mix. Of the projects, the greatest interest related to wind energy (45% of proposals), biomass (34%) and hydroelectric power (8%).”

 

As the National Energy Regulator for South Africa (Nersa) introduced phase II of the Refit, more optimism joined the country’s RE market, particularly for solar investment. Ernst & Young said: “The 20-year guarantee at rates comparable to Europe’s top solar markets could be enough to generate attractive returns at relatively high discount rates. While the approved tariffs are valid for 2009, it is not clear how will they decline over the years.”

 

The Refit combined with other incentives like the clean development mechanism, tradable renewable energy certificates, grant financing, and premium power purchase prices have helped progress the development of the Bethlehem hydropower project, Darling wind farm, and Nelson Mandela Bay RE Project.

 

Ernst & Young describe South Africa’s wind resources as moderate, but that still hasn’t stopped investors like Mainstream Renewables. The report said that “wind is highly seasonal and varied, resulting in relatively low average.” However, as reported by Alternative Energy Africa in December, Mainstream Renewables’ CEO Eddie O’Connor said, “We are very encouraged by the government’s work to date to promote renewable energies.”

 

Meanwhile, the country has high levels of solar radiation with Ernst & Young highlighting areas like Upington. And small hydro has an installed capacity of 34 MW with the short term showing the potential for an increase of 69 MW and long term nearing 94 MW of identified resources. The report also claims that biomass could “theoretically provide 50% of the national demand” with recent developments in the implementation and development of landfill gas projects.

 

Top countries in the report include:

1. US

2. China

3. Germany

4. India

5. Spain

5. Italy

7. UK

7. France

9. Canada

10. Portugal

11. Greece

12. Ireland

13. Australia

14. Sweden

15. Netherlands

15. Poland

17. Denmark

17. Belgium

17. Brazil

20. Norway

20. Japan

22. New Zealand

22. Turkey

22. South Africa

25. Czech Republic

26. Austria

27. Finland

 

Subscribe to Alternative Energy Africa today for more in depth news in the alternative/renewable energy sector and be sure to grab your risk-free trial to see what we’re doing in 2010.