Tata, Exxaro turn to wind and sun
India's largest business group, Tata, has joined forces with coal producer Exxaro to help supply energy to the more than half-a-billion people in sub-Saharan Africa who do not have electricity.
The result is a company called Cennergi, which hopes to provide the region with a very ambitious 16GW of power by 2025. A large part of this, about 45%, will be generated from renewable energy sources, predominantly wind and solar power.
Cennergi has stated that wind has the power to supply five times the planet's energy needs and that there is enough energy in one hour of sunlight to power the planet for a year.
"I know these are ambitious targets and most people are probably thinking, 'I don't know what you have been smoking, but it must be good.' But we believe that this is achievable, also depending on how quickly we can get the ball rolling," said Thomas Garner, the head of the new company.
Cennergi already has three wind projects in the pipeline in South Africa, with a combined capacity of 274MW, and two smaller solar projects that will generate 41MW.
Other countries targeted by the company include Botswana, Namibia and Mozambique.
Cennergi has tendered its first bid in the second window of South Africa's renewable energy, independent power producer purchase programme.
Results of this process will be known on May 14.
Garner said the venture partners have already spent a substantial amount of money to bring projects to a stage where they can compete in a bidding process. However, he declined to divulge the exact amount spent.
If Cennergi emerges as the preferred bidder, the first projects could be up and running as soon as 2014.
Exxaro's Sipho Nkosi said energy, especially renewable energy, will be the business of the future - perhaps a surprising statement from someone who heads up the second-largest coal-producing company in South Africa.
The two partner companies will investigate working together on coal ventures, specifically on projects in SA's Waterberg region.
India is the largest importer of South African coal.
Nkosi said Exxaro, although primarily a mining company, is delighted to have a partner such as Tata Power, as it has the necessary expertise and experience in the energy business.
Tata Power is the biggest privately owned electricity provider in India.
Tata's Anil Sardana said the company has been running hydro-generated electricity projects for more than 100 years and has moved into wind and solar power.
Because South Africa has very limited capacity in the manufacturing and operation of renewable energy technologies, skills transfer and capacity building will be emphasised in the partnership.
"The renewable energy space is still at a very immature stage in South Africa and the rest of Africa and we are opting to build the necessary critical mass needed through this partnership," said Garner.
Nkosi noted that there will be a strong drive to create jobs and to source as much raw material as possible locally, with at least 25% local procurement being stipulated.
Hopes are that the company and others like it will cause a ripple effect that will encourage the development of a ''green" manufacturing sector.
Tata BP Solar has strong capabilities in this regard, but there are no plans to set up a plant in South Africa yet.
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