Chairperson Mark Tiepelt tells Engineering News Online that particular opportunities are arising in off-grid applications, particularly in the farming, food processing and municipal waste sectors.
He is less optimistic, however, about the prospect for large-scale independent power producers bidding for the renewable-energy allocation made available by the Department of Energy, as material constraints remain in securing feedstock resources at scale, particularly from municipal landfill sites.
However, a University of Cape Town study still estimates that there is potential to develop 2 500 MW of biogas capacity over the medium term and Tiepelt estimates that this could equate to the development of a R10-billion domestic industry.
The near-term prospects are arising inside the fences of piggeries, chicken and cattle farms, abattoirs, cheese factories, wine and fruit farms, food processing facilities and municipal sewage works.
The idea would be to reduce reliance on Eskom by producing power for the factory, or farm’s own consumption by converting the organic waste into gas that, in turn, can be used to produce electricity.
The process typically involves producing biogas, which primarily comprises methane and carbon dioxide (CO2), from organic feedstock that is fed into anaerobic digester tanks. The gas is then tapped and fed into a gas engine generator to produce electricity and heat, which can be recovered and used. Biogas can also be compressed and used to power motor vehicles.
Apart from electricity and heat, Tiepelt says biogas plants also offer the prospect of converting potentially environmentally harmful waste material into organic fertiliser, while placing a facility on a carbon-neutral footing.
Although South Africa adopted such solutions in the 1970s, there has been little incentive to invest in commercial applications over the past few decades, owing to South Africa’s low electricity prices and an absence of incentives to shorten return horizons.
However, South Africa’s electricity prices have trebled between 2007 and 2012 and Eskom is currently seeking five yearly tariff increases of 16%, which could result in the price more than doubling between 2013 and 2018.
In addition, rebates are now available under Eskom’s ‘standard offer’ rebate scheme for small-scale renewables at a rate of R1.20/kWh over a three-year contract period, while the DTI’s Manufacturing Competitiveness Enhancement Programme’s production incentive includes grants for green technology and resource efficiency improvements.
Applied together, these incentives can materially reduce the payback period and substantially increase the return on a biogas investment.
“If these incentives remain in place, I believe there could be a significant increase in the number of commercial-scale projects that will be developed in South Africa in the coming few years,” Tiepelt says.
Whether the Eskom rebate remains in place, though, could depend on the outcome of the National Energy Regulator of South Africa’s current deliberations on Eskom’s allowable revenue application.
A number of participants at recent public hearings on the applications questioned whether tariffs should be used to fund the utility’s demand management programmes, which make up R13-billion of an application for allowable revenue of nearly R1.1-trillion for the period from 2013 to 2018.
Currently there are probably around 200 small-scale biogas facilities installed in South Africa, which are collectively able to produce around 3 MW.
SABIA, which is being launched at the upcoming Energy Indaba, in Johannesburg, will seek to improve the visibility of biogas within South Africa’s energy mix, as well as promote the job creation and industrialisation potential that a major expansion of the industry could deliver.