Rapid Growth Opportunities – Independent Power Producers in South Africa
 

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This presentation gives us a look at rapid growth opportunities through independent power producers in South Africa.

This presentation gives us a look at rapid growth opportunities through independent power producers in South Africa.

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Rapid Growth Opportunities – Independent Power Producers in South Africa Presentation Transcript

  • 1. Rapid Growth Opportunities – Independent Power Producers in South Africa Gareth Blanckenberg, Research Analyst Energy & Power September 7, 2011
  • 2. Today’s Presenter: Gareth Blanckenberg Functional Expertise • Experience in analysis and research, including several market and academic research projects. Industry Expertise Experience in the energy and power sector - Analysis of investment opportunities in Sub-Saharan Africa energy sector - Energy efficiency research What I bring to the Team • General and varied experienceGareth Blanckenberg • Financial backgroundResearch Analyst Career HighlightsEnergy and Power • Professional SailorSystems Education • BBusSc in Management Studies from University of Cape Town, South AfricaFrost & SullivanAfricaCape Town 2
  • 3. Key Market Drivers and RestraintsPrivate Power Generation: Key Market Restraints (South Africa), 2011 Uncertainty Historically Low Tariffs Skewed Risk Allocation Private Power Generation: Key Market Drivers (South Africa), 2011 Growing Demand Constraints on Eskom Liberalization of Electricity Tariff Increases Industry 3
  • 4. Non-Eskom Generation Private Power Generation: Non-Eskom Power (South Africa), 2011 Maximum Name Location Feedstock Capacity (MW) Darling Wind Power Darling, WC Wind 5.2 Electrawinds Coega, EC Wind 1.8 Bethlehem Hydro Bethlehem, FS Hydro 7 Friedenheim Hydro Nelspruit, Mpumalanga Hydro 3 Kanhym Farm Mpumalanga Biogas 1.5 Kelvin Power Johannesburg, Gauteng Coal 600 Tangent Mining Bloemfontein, FS N/A 85 IPSA Newcastle, KZN Gas 18 Thos Begbie Middelburg, Mpumalanga Gas 10.7 SASOL Various N/A 240 Petro SA Mossel Bay, WC Biogas 4.2 SAPPI Various Waste/Coal 130 Mondi Various N/A N/A Tongaat Hulett Various Bagasse/Coal 60 TSB Sugar Various Bagasse 57.5 ABSA Towers Johannesburg, Gauteng Gas + Diesel 18 MTN Johannesburg, Gauteng Gas 2 Source: Frost & SullivanM6C7-14 4
  • 5. IRP 2010: Capacity Requirements by Technology Private Power Generation: IRP2010 New Build Analysis (South Africa), 2011 New Build Options Import Total New Total System Coal CCGT OCGT Wind Solar PV CSP Nuclear Hydro Build Capacity 2010 0 0 0 0 0 0 0 0 640 44535 2011 0 0 0 0 0 0 0 0 809 45344 2012 0 0 0 0 0 300 0 0 1103 46447 2013 0 0 0 0 0 300 0 0 2901 49348 2014 500 0 0 0 400 300 0 0 3021 52369 2015 500 0 0 0 400 300 0 0 2564 54933 2016 0 0 0 0 400 300 100 0 1432 56365 2017 0 0 0 0 400 300 100 0 2968 59333 2018 0 0 0 0 400 300 100 0 1523 60856 2019 250 237 0 0 400 300 100 0 2496 63352 2020 250 237 0 0 400 300 100 0 2010 65362 2021 250 237 0 0 400 300 100 0 1212 66574 2022 250 0 805 1143 400 300 100 0 1365 67939 2023 250 0 805 1183 400 300 100 1600 2358 70297 2024 250 0 0 283 800 300 100 1600 2424 72721 2025 250 0 805 0 1600 1000 100 1600 3835 76556 2026 1000 0 0 0 400 500 0 1600 3500 80056 2027 250 0 0 0 1600 500 0 0 2350 82406 2028 1000 474 690 0 0 500 0 1600 1414 83820 2029 250 237 805 0 0 1000 0 1600 2764 86584 2030 1000 948 0 0 0 1000 0 0 2948 89532 6250 2370 3910 2609 8400 8400 1000 9600 45637 Note: All figures are rounded; Source: IRP2010M6C7-14 5
  • 6. IPP Procurement Programme• REFIT scrapped in favour of Competitive Bidding process Technology Capacity Price Cap Onshore Wind 1,850 MW R1.15 kWh Solar PV 1,450 MW R2.85 kWh CSP 200 MW R2.85 kWh Biomass Solid 12,5 MW R1.07 kWh Biogas 12,5 MW R0.80 kWh Landfill Gas 25 MW R0.60 kWh Small Hydro 75 MW R1.03 kWh Small Projects (<5MW) 100 MW• Projects need to be able to feasibly enter commercial operation by June 2014 • CSP by June 2015 M6C7-14 6
  • 7. Other Procurement Programme’s• Medium Term Power Purchase Programme (MTPPP)• DoE Peakers Programme• Municipal Generation• Multi Site Base Load (MSLB) IPP Programme• Regional Import IPP Programme’s M6C7-14 7
  • 8. Electricity Tariff Path Private Power Generation: Average Tariff Changes (South Africa), 2011 Period 07/08 08/09 09/10 10/11 12/13 13/14 14/15 15/16 Average Tariff R0.19 R0.25 R0.33 R0.41 R0.52 R0.66 R0.82 R1.03 Rate of Increase 34.2% 31% 24.8% 25.8% 25.9% 25% 25% CAGR 27.3% Source: Frost & Sullivan M6C7-14 8
  • 9. Opportunity for IPP’s Growth and Mix of Generation Capacity IRP2010 • South Africa is blessed with natural 90,000 resources for generation utilising all available feedstock. 80,000 70,000 • Until 2011, market development has been restrained. 60,000 50,000 Other • The first round of the IPP Pumped Storage Procurement Program for Renewables 40,000 Nuclear should open the floodgates and pave Renewables the way for other projects. 30,000 Hydrocarbons 20,000 • A DOUBLING of current generation capacity is required, so the 10,000 opportunity is large. - Capacity in 2010 Capacity in 2030 Source: Frost & SullivanM6C7-14 9
  • 10. Next Steps Request a proposal for Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. (enquiries@frost.com) Join us at our annual Growth, Innovation, and Leadership 2012: A Frost & Sullivan Global Congress on Corporate Growth occurring 15 – 16 May, 2012 (www.gil-global.com) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 10
  • 11. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by rating this presentation Frost & Sullivan’s Growth Consulting can assist with your growth strategies 11
  • 12. Follow Frost & Sullivan onFacebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 12
  • 13. For Additional InformationSamantha James Stephane GayCorporate Communications Sales ManagerIndustry Energy & Power(021) 680-3566 (021) 680-3286samantha.james@frost.com Stephane.gay@frost.comCornelis van der WaalResearch ManagerEnergy & Power(021) 680-3266cornelis.vanderwaal@frost.com 13