Johannesburg — The recent power supply problems in SA and the need to limit the country's historical reliance on coal and imported oil have put the spotlight on renewable energy sources.

Given their relatively short lead times, renewable energy projects can alleviate the pressure on power utility Eskom while it awaits additional capacity from its new power stations.

In March this year, the National Energy Regulator of SA (Nersa) set the renewable energy feed-in tariffs at R1,25 a kilowatt-hour (kWh). The tariffs for wind and other renewable energy technologies were well received, with most industry players saying they would stimulate investment. The government has set a target of 10000GWh renewable energy contribution to final energy consumption by 2013.

Investment in renewable projects in SA has generally been slow. But in March, Mainstream Renewable Power, an Irish renewable energy company, and local wind farm developer Genesis Eco-Energy announced plans to build wind farms that will generate more than 500MW by 2014.

Eskom plans to build a 100MW wind farm in Koekenaap in the Western Cape, to be operational next year. SA has one existing wind farm, in Darling in the Western Cape.

Frost & Sullivan energy research analyst Sipha Ndawonde yesterday said the contribution that wind-power projects would make was largely dependent on key issues such as grid capacity, private sector investment, environment impact assessment, application processes and SA's regulatory environment.

Ndawonde said, however, that wind energy was unlikely to form an integral part of the future base load energy capacity in SA. Nuclear and coal energy would be the key components of the energy mix . "This is not to say that wind-power projects do not have an important role in the country, though."

The lower upfront capital costs for wind power and shorter lead times allowed wind power projects to increase capacity to the national grid quicker than a new coal or nuclear plant. Ndawonde said SA had the necessary resources to develop a significant wind energy industry.

"The wind potential is abundant, regulatory incentives are favourable and project developers, equipment suppliers and financiers have already expressed intent to get involved in the sector. What is required now is more dialogue between the regulators of the renewable energy industry on issues such as grid stability, grid connection costs and the time frame in which these issues will be resolved."