Johannesburg - South Africa’s Renewable Energy Independent Power Producers Procurement Programme has encouraged a new generation of black renewable energy industrialists, with wind farms, solar plants and fuel cells driving their wealth.
But the new breed of energy tycoons are not only excited about profits. As pioneers of South Africa’s fledgling sustainable energy sector, they have stars in their eyes when it comes to the green economy.
Gqi Raoleka of Pele Green Energy dreams about becoming South Africa’s most significant green power utility.
Mashudu Ramano, founder and CEO of Mitochondria Energy Company, sees a future where green energy eventually surpasses fossil fuels.
“Do Well. Do Good”, the motto of Heather Sonn’s holding company, Gamiro Investment Group, inspired the company to invest in renewables. Sonn’s energy investment company, Khana, wants to grow into a fully fledged South African-owned and run independent renewable power producer.
So far, the big international players have mainly dominated the renewable space – and with good reason, said Sonn.
“The cash investment requirement is huge and required skills are still new to us as a country,” she said.
Creating a new class of black industrialists is a major motivator for the Industrial Development Corporation (IDC) when it looks to fund South Africa’s emerging renewable power industry.
Its industrial infrastructure head, Lizeka Matshekga, said the IDC had played a significant role in establishing the South African renewable energy sector over the past three years, having supported 24 projects with financial commitments totalling R14 billion.
She said the success of the renewable programme had created a new set of skills through collaboration and experience-sharing among local and international financiers, particularly regarding project finance.
“Support for increased black participation in the sector has created opportunities for the local manufacturing of green energy components. This has resulted in the creation of job opportunities, particularly in areas where economic activities were subdued,” she said.
Matshekga said the IDC realised the fundamental importance of meaningful black participation in the sector. “Our support has enabled the inclusion of communities in the ownership of projects.”
Sonn said Gamiro typically invested alongside a strategic technical partner like an international utility that had established independent power producers in various parts of the world before.
“They have experience. We have to arrange our financing and ensure that we can build a viable project and make a return on our investment and effort.
“Our ambition for Khana is to create a long-term sustainable independent power producer where we have a greater capacity to fund our own deals and operate our own plants,” she explained.
Masechaba Mabilu, economic development manager of Acciona Energy SA, said not-for-profit organisation Soul City owned about 10% of Acciona’s solar and wind farm.
“Soul City has to be commended for being proactive and seeing the opportunity to boost their funding because there has been less donor funding,” said Mabilu.
“Soul City formed an investment arm to get a stake in the renewable sector. That was very innovative.”
As the renewable programme success grew, she said there were more players moving into the market.
In the beginning, black industrialists were few and far between, she added.
Black energy start-up Pele Green Energy has built up quite a portfolio in the renewable energy sector. The company has participated in all the bidding windows of the Renewable Energy Independent Power Producers Procurement Programme and was successful in procuring 870 megawatts of projects across the four bidding windows.
Pele has projects spread across photovoltaic solar and wind farms and concentrated solar power. The company’s 100MW solar concentrated power plant with molten salt storage is heading towards financial closure.
Pele Green Energy
Five young South Africans – Raoleka, Thapelo Motlogeloa, Obakeng Moloabi, Boipelo Moloabi and Fumani Mthembi – founded Pele just less than a decade ago.
Raoleka believes the renewable energy programme was only the beginning of shaping a brand-new green industry in South Africa.
“From the programme, several large-scale independent South African power utilities will emerge who will export skills to the African continent. We work tirelessly each day in the pursuit of ensuring that Pele is one of those entities,” he said.
But the early days were not easy.
“The sector has high barriers to entry due to the specialised nature of the technology and power plants. The investment amounts and capital expenditure associated with the power plants are further factors that increase the barriers to entry.” Raoleka explained.
And Pele was certainly not exempt from these challenges. “Our access to capital in our earlier days was very challenging in an environment where very few South African players had a track record to back up the large investment amounts we were attempting to raise,” said Raoleka.
He said the department of energy’s renewable programme is now internationally recognised and is acclaimed for buying renewable energy.
“This means that the environment in which we as independent power producers operate is transparent, bankable and dependable.”
Raoleka said the road ahead was still long. He is especially excited about his company’s foray into concentrated solar power.
“With the increased advancements in the concentrated solar power space where solar projects are incorporating up to nine hours of storage capabilities in the projects, it is a bright outlook for the renewables sector to continue to outdo fossil-based fuels,” he said.
Mitochondria Energy Company
Ramano started the Mitochondria Energy Company in 2006. He wanted to contribute to a sustainable future with a sustainable energy service and became interested in fuel cells that use platinum as a catalyst in energy generation.
“I decided to establish a business focusing on decentralised and distributed energy technologies,” he said.
His company works with businesses to find the best personalised sustainable energy solutions, including designing custom-made solutions using fuel cells, flow batteries and solar photovoltaic.
“My proudest moment was when we went live with the first commercial fuel cell installation at the Chamber of Mines. I’m delighted to be part of this emerging industry because of the contribution it’s going to make to develop our country and create lots of new jobs.”