Renewable energy in South Africa: Wind power takes the lead!

The wind resource potential for South Africa is high, with the Eastern, Western and Northern Cape provinces the most favourable locations.  Not only does South Africa have good wind resources, but also policies and programmes in place to support the development of this resource.

South Africa’s transition to an environmentally sustainable, climate-change resilient and low-carbon economy has been mapped in the National Development Plan (NDP): Vision 2030.  An important consideration is the conversion from reliance on coal-powered electricity to renewable sources.  The Department of Energy’s Integrated Resource Plan (IRP 2019) released in October 2019 calls for 37 696 MW of new and committed capacity to be added between 2019 and 2030 from a diversified mix of energy sources and technologies as ageing coal plants are decommissioned.

Wind power, due to its value proposition, technology price developments and steep downward price trends, has taken the largest share of the planned renewable energy investments to date, and is planned to comprise 22.7% of the country’s power generation by 2030.

As at October 2020, the total investment project costs, of all Independent Power Producer (IPP) projects under construction and projects in the process of closure, is R209.7 billion, of which R80.6 billion is for onshore wind IPPs, indicating a significant investment to date in wind power.  The 22 wind IPPs that have reached commercial operations to date have reported 2 723 job years for South African citizens, as well as a reduction in CO2 emissions by 6.4Mtons.

The country has more than 1,365 wind turbine generators equaling 3 672 MW installed capacity of which 2,020MW is fully operational.  The future pipeline, based on IRP 2019 allocations indicates 14 400 MW of new installed wind power capacity, at a cost of R18.8mil / MW, equating to an investment opportunity of R271 billion.

Local manufacturing industries will directly benefit from this investment through local content requirements stipulated in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) started in 2011.  As of 2021, the REIPPPP has completed 4 successful bidding rounds with the fifth expected in Q1 of 2021.  B&M Analysts is supporting our sectors to actively participate in this opportunity through research and motivation for designation of the sector.

South Africa is certainly making significant progress in the renewable energy space, with wind power a leading opportunity for both sustainable power production and economic development.