December 2020
The South African Wind Energy Association (SAWEA) estimates that the sector will unlock annual investment of R40 billion for the next decade, on the assumption that smooth procurement and policy will deliver in line with the country’s 2019 Integrated Resource Plan (IRP). However, should the government deliver on its commitment to implement an Independent Transmission Grid System and Market Operator (ITSMO), as indicated by Public Enterprises Minister, Hon. Pravin Gordhan, this sector could become a major economic driver, stimulating not only local investment, but much sought after foreign capital too through available ‘Green Financing’.
“Accelerated procurement of new renewable power generation has the potential to not only fix the country’s need to improve its energy availability factor, but also plays a role in the President’s vision to rebuild the country in a post-COVID era, as reflected in his ambitious targets during the third annual South Africa Investment Conference, in November 2020,” says Ntombifuthi Ntuli, CEO of SAWEA.
The renewable energy sector has been reawakened this year, following a series of Ministerial Determinations, with the sector geared up for a new procurement round in the first quarter of 2021, or as some are predicting, as early as January.
The role of renewable energy has been recognised as imperative in bringing capacity into the grid faster, reliably and cost effectively in order to close the capacity gap that will be created by the country decommissioning 10 000 MW carbon-intensive power, over the next decade
Wind power is also moving into geographic locations previously ignored in the earlier stages of the Renewable Energy Independent Power Producer Procurement Programme (REI4P), which saw the IPPs developed and constructed in coastal regionals and parts of the country that are known to be rich in wind resources, namely the as the Western Cape, Eastern Cape and Northern Cape provinces. With the maturing technology, wind turbine generators (WTG’s) are being built with higher hub heights, which means that new provinces can benefit from the production of wind power too.
“We can increase our contribution to the Just Energy Transition, as we see wind developers already exploring area’s in Mpumalanga, with wind speed measurements already underway,” added Ntuli.
Manufacturing facilities can be built inland in provinces previously excluded, bringing new job creation and skills to area’s that will lose coal jobs, as decommissioning starts to take place in these areas.
With smooth sector growth and increased localisation requirements by the DMRE, economic benefits will increase and further drive local investments.
“Our industry drives development in so many sectors, more than just local tower manufacturers. Consider the role we have to play in transportation, the flagging steel sector and construction industry, in addition to specialised components and skills development that were previously imported into the country,” commented Ntuli.
In anticipation of Bid Window 5 the wind sector has already developed several projects and achieved all the necessary authorisations, ready to deliver on the allocated annual capacity of 1600 MW in line with the power plan, which makes up a total of 14.4 GW over the next ten years.
Bid Window 4 wind farms are already connected to the grid, with a total of 1.3 GW of new wind power capacity, coming on stream. The first of these to reach Commercial Operations Date, is the 110MW Perdekraal East Wind Farm, in the Western Cape and 140 MW Kangnas Wind Farm in the Northern Cape. 32 MW Excelsior Wind and 139 MW Nxuba Wind Farm are also expected to reach this milestone by end-2020, with the additional eight power generators to be completed during 2021.
