Green energy is the future of energy investment

In recent years, the word “green” has been become the de rigueur word of the times. “Is your company green? Is this car green? Is your lifestyle green?” You cannot escape the word and all that comes with it.

Today, most people understand that technological progress has been a double-edged sword. It has provided us with innumerable conveniences and advancements.

But our thirst for knowledge and wealth, combined with hubris and ignorance means that the price we have had to pay for all that progress may have been too high. Fortunately, we have come to realise that we can still obtain all that progress we desire, if only we change our approach. And many companies have started adopting more environmentally sound policies – not only to their own benefit, but likely to the greater benefit of humanity.

In recent years investment in sustainable, environmentally clean energy has increased, according to information from the United Nations Environment Programme (UNEP). In 2008, financial support amounting to $148 billion was pumped into various projects revolving around green energy. That is a 60% increase since 2006, according to a UNEP-commissioned report, “Global Trends in Sustainable Energy
Investment 2008”.

Worldwide, investment in wind energy proved most attractive with $50bn made available in 2007. The report highlighted solar power as the energy alternative achieving the most financial investment growth, attracting in the region of $28bn.

CEO of New Energy Finance and co-author of the report, Michael Liebreich said of the developments that “2007 was a banner year for the clean energy industry. Wind continued its strong progress, with installed capacity passing the 100 gigawatt mark [in March 2008].

Solar is maturing rapidly, with heavy investment to ease the silicon bottleneck and new thin-film technology beginning to reach scale. And there are plenty of other technologies lining up to be the next ones to begin a real march to scale – including biomass and geothermal.”

As encouraging as those numbers and comments are, investment in an African context is not what it should be. Sub-Saharan Africa, “arguably the region that has the most to gain from renewable energy”, remains largely unexploited, says the report. The National Energy Regulator of South Africa (Nersa) released information in late March/early April regarding renewable energy feed-in tariffs. The tariff guidelines set the price that renewable energy suppliers will be paid for a unit of electricity. The news effectively authorises the production of green energy by agencies outside of the national supplier Eskom, and guarantees a buyer for that energy. This development should provide a valuable incentive for future investment in green energy.

The renewable energy targets of 10 000GWh (gigawatt hours) by 2013 set in 2004 seem much more reachable now that the current tariff guidelines have been announced. Industry players and commentators have taken it as a sign of the government’s commitment to
green energy. Under the new tariff guidelines, green energy suppliers will receive R1.25/kWh for wind (up 65c/kWh), 90c/kWh for landfill gas (up from 43c), 94c/kWh for small hydro (up from 73c) and R2.10/kWh for concentrated solar power (up from 65c). The power purchase agreement with suppliers will last for 20 years and the tariffs will be reviewed every year for five years and every three years thereafter. Eskom will act as the renewable energy power-purchasing agency. Regular consumers should not take this as a sign to charge out for the closest solar panels retailers in the hope of selling their excess electricity to Eskom. Currently, the guidelines apply specifically to utility-scale power generation and excludes rooftop solar panels. The development does bode well for the future and provides excellent opportunities for future investment.

Perhaps future regulations will provide for private citizens to sell back there excess energy. One of the things that stings the most about the “Global Trends in Sustainable Energy Investment 2008” report is Africa’s underplayed role in energy investment. That lack of foresight has robbed the continent, and South Africa in particular, of a very specific opportunity that could well have placed the country at the forefront of green energy production. Professor Vivian Alberts and his colleagues at the University of Johannesburg have spent the past 13 years developing highly advanced photovoltaic, or thin-film, solar panels. The development of these next-generation solar panels could well be the solution to the power generation problems of South Africa – and the world.

Current solar modules convert only direct sunlight into electrical energy, but the panels developed by Alberts’ team are able to generate electricity regardless of the light conditions. The manner in which the cells are constructed means comparatively high energy yields are obtainable even under partially shaded or overcast conditions.

This development means that areas which would not consider solar power as an alternative now have it as a viable option.

The new thin-film solar modules are based on a wafer-thin, semiconducting absorber layer made of copper, indium, gallium, sulphur and selenium, and are half the thickness of a human hair and almost a hundred times thinner than a silicon cell. Also, unlike currently available solar panels, the thin-film panels have improved temperature coefficients, which means they have lower performance losses at high temperatures – ideally suited to South African summers.

Alberts confirmed that production costs would be well below the current price of solar panels – at least 50% cheaper than anything that is commercially available at present. The rub, however, is that despite the South African origins of this revolutionary technology, the country is unlikely to reap the full benefit of its invention. Once Professor Alberts had completed his research and proven the technology as viable and operable, he was unable to secure sufficient local investment to keep the technology solely in South African hands. However, he found amenable attitudes in Germany.

Currently, the manufacturing rights for the panels are with Johanna Solar Technology (JST) in Brandenburg, Germany. Heide Traemann, a spokesperson for JST said the Brandenburg factory is targeting 500 000 panels a year. “We now have 90 people working for JST. We are not producing yet, but are currently focusing on the so-called ‘process setup’, which means the qualification of machines. Once this is completed, production will begin.”

Fortunately, some of JST’s seven shareholders include a South African element, namely the state-owned Central Energy Fund and Anglo Coal. More importantly, Alberts is determined that the panels have a presence in South Africa. A factory site to produce the panels locally has already been identified in Cape Town.

The plant itself has already been designed and will hopefully be pushing out the photovoltaic solar panels in the near future. Hermann Iding, spokesperson for Aleo Solar, the German company that will distribute the panels in Europe, said they were preparing for the launch of the thin-film modules later this year.

Zaid Kriel