SA may have renewable feed-in tariff by March

The National Energy Regulator of South Africa (Nersa) hopes to finally approve the long-awaited renewable energy feed-in tariff (Refit), aimed at stimulating investment in the sector, on 9 March 2009.

Owing to the currently more expensive cost of generating electricity from renewable energy sources such as wind, sun and natural gas, feed-in tariffs are seen as a structure to stimulate large-scale investment in the renewable energy sector.

The Refit would not lower the cost of electricity for the customer, but would subsidise renewable energy generators. The tariff was expected to cover the cost of generation, plus a fair return for investors.

“The model calculates the subsidy amount as the difference between the feed-in tariff provided, and the avoided cost of power generation. This gives an indication of the additional costs to the consumer of the tariff programme,” indicated Nersa.

The model also allowed for the inclusion of carbon revenue through the Clean Development Mechanism.

The tariff schedule for 2008 to 2013 as setout in the consultation paper would be as follows:

Eskom Distribution would be appointed the renewable energy purchasing agency, with the responsibility of the regulator limited to overall monitoring and review.

The NERSA proposal is not without its critics: WWF climate change programme manager Richard Worthington stated: “We have called on Nersa to reconsider their proposal and call for the tabling of an improved proposal, as soon as possible. We hope to see a stronger proposal that provides for an independent renewable energy purchasing agency, and a more cost responsive way of setting tariffs.”

Original article: Christy van der Merwe. Engineering News. 5 January 2009. Read more…

Earthlife Africa has come out to say that while they support the principle behind REFIT, they have some concerns about the actual policy. They set forth 10 reccomendation on how to improve the draft policy.

You can read more here.