Start a Renewable Energy Company

Renewable energy is energy that is collected from renewable resources, which are naturally replenished, such as sunlight, wind, rain, tides, waves, and geothermal heat.  Renewable energy often provides energy in four important areas: electricity generation, air and water heating/cooling, transportation, and rural (off-grid) energy services.

Renewable energy will become one of the most popular industries in South Africa; it may even become the most important. This is also the most likely industry to produce the next self-made billionaire.

Eskom – the institution that generates 95% of South Africa’s electricity – is insolvent and there is no realistic plan to save it. Whatever permutation you consider there are only two outcomes: 1. Electricity that is too expensive for most South Africans.   2. No electricity. There is no plan that can fix Eskom, not only will it take too long to build new power stations, it will take too long to break ground on a new power station. Any new power station that Eskom tries to build will be tied up in years of limbo as there are too many conflicting agendas and that is before the losing bidders go to court to oppose the granting of a contract.

South Africa’s future lies in private power generation.

Types of renewable energy
Solar Energy
– Solar energy, radiant light and heat from the sun, is harnessed using a range of ever-evolving technologies such as solar heating, photovoltaics, concentrated solar power (CSP), concentrator photovoltaics (CPV), solar architecture and artificial photosynthesis.
Wind Power – Wind-generated electricity (Air flow can be used to run wind turbines.)
Hydropower – Since water is about 800 times denser than air, even a slow flowing stream of water, or moderate sea swell, can yield considerable amounts of energy.
Geothermal – Thermal energy generated and stored in the Earth.
Bio Energy (including Biomass, Biogas, and Biofuel) – Bioenergy is renewable energy made available from materials derived from biological sources. Biomass is any organic material which has stored sunlight in the form of chemical energy.

Just looking at the different types you can see how vast this industry is, some forms of renewable energy is still a bit expensive but with Eskom’s costs spiralling out of control – the most of which has little to do with the power generation – there will be a time that Eskom will eclipse all forms of renewable energy. In fact, if you are a high-end user you might already be paying renewable energy prices from Eskom. You have to remember Eskom is already too expensive for most of South Africans that is why higher income people are subsidising the lower income (who make up the vast majority), this is not sustainable in the direction that SA is moving (the middle class is getting poorer and poorer saddled with all types of costs and taxes).

Business Models
There are numerous business models in the renewable energy sector and if you are not looking at one, you might be losing out big time in future. The potential in this industry is so great; it’s hard to know where to start. But let’s start at the easiest.

The Easiest
The easiest way to get started in this industry is without a doubt solar. The cheapest way would be solar panel installation which requires only time and skill. Continuing to the setup based on requirements.

The most potential
A lot of potential for small businesses in this industry lies in energy storage. The energy harnessed from the sun, wind or water needs to be stored. The sun/wind/waves are not available the whole day, so what happens when it subsides? This is where the need for batteries comes in, the most popular and energy dense battery technology/chemistry being lithium ion. This can be in the primary sector (mining and trade of the minerals that make up the battery), manufacturing, import, distribution, wholesale, retail, refurbishing and recycling etc.

This opportunity extends from the townships to high-end users. There has been a push in recent years for renewable to replace paraffin lamps when it comes to lighting. Lights connected to a solar panel and battery is all you need. People don’t even need a panel, people can take their batteries to be recharged by entrepreneurs in their area and the entrepreneurs can charge that battery using solar energy.

The niche
Wind and hydro are definitely still niche in SA and there might be an opportunity here, especially with low cost wind turbines.

The future of Independent Power Producers in SA
In recent years there has been a lot of talk about Independent Power Producers or IPP’s in SA. What everybody can agree on is that SA has no future with Eskom alone, it needs IPP’s. What can’t be decided on is how to go about things (everybody has their own agenda).

Looking at the official Independent Power Producer Procurement Programme homepage, instead of having the most important information – how entrepreneurs can join the Independent Power Producer Procurement Programme,  it has politicians plastered all over its homepage while the matters of substance are merely footnotes:

This is how the homepage looks

That being said, let’s hope the future looks brighter without Eskom. I will take a closer look at the various renewable technologies in future.

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