South Africa: Capital subsidies for renewable energy technologies

The Department of Minerals and Energy in 2005 announced the establishment of the Renewable Energy Subsidy Scheme. The scheme is envisaged to be a once-off capital grant made available for project developers in 2005/06 - 2007/08 financial years. It also established the Renewable Energy Finance and Subsidy Office (REFSO), whose mandate includes the management of renewable energy subsidies and provision of advice to developers and other stakeholders on renewable energy finance and subsidies, (including size of awards, eligibility, procedural requirements, etc). A Departmental Renewable Energy Subsidy Governance Committee (SGC), which will meet three times a year.

Date Implemented: 2005

Status: In Force; Government Initiative

Funding Information: The subsidy can not exceed 20% of the total capital cost, and minimum project size is 1 MW (for electricity), implying a subsidy amount of R250,000.

Targets: Reduced capital costs for RETs for 2005-2008. Assume technology learning rates thereafter. The subsidies for 2005/6 are R250 / kW capacity for electricity; R 273 / kl capacity / year for biodiesel and R 167 / kl capacity / year for bio-ethanol or equivalents for other RE technologies.

References: http://www.iea.org/textbase/pamsdb/detail.aspx?mode=weo&id=3455