News24

Renewable energy fee beneficial

2010-03-30 21:08

Pretoria - A renewable energy feed-in tariff (Refit) would benefit the country, the SA Wind Energy Association (Sawea) said on Tuesday.

"Refit would be beneficial as the penetration of renewable energy into the market largely hinges on investment security and with Refit, the risk premium required by investors can be minimised by the high level of price security in the system," Sawea deputy chair Mark Tanton said.

He was addressing a National Energy Regulator of SA (Nersa) hearing in Pretoria on the selection criteria for renewable energy projects under the Refit programme.

According to Nersa, a Refit is a mechanism to promote the deployment of renewable energy that obliges certain institutions to buy the output from qualifying renewable energy generators at pre-determined prices.

"Tariffs are high enough to cover investment costs and provide a reasonable rate of return," Tanton said.

Jobs and development

Refit had a strong track record as it had proved to be a success internationally, he said.

"The use of Refits improves access to finance for developers, which in turn promotes the development of an indigenous renewable energy industry."

Tanton said the development of a robust industry in turn encouraged job creation and opened up opportunities for black economic empowerment and the integration of historically disadvantaged people during industry initiation and expansion.

There were a number of important elements that made up a good Refit, he said.

These included providing tariffs for all potential developers, ensuring financial security, removing barriers to grid connection and developing an appropriate administrative and application process.

Other important elements were ensuring public acceptance of the Refit mechanism and limiting and moderating producer surplus.

Nersa was holding hearings over two days on the selection criteria for renewable energy projects under the Refit programme.