The outlook of the wind energy sector in South Africa is positive, owing to the increasing number of wind farm projects being awarded through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), says University of Cape Town Graduate School of Business’s Professor Anton Eberhard.
“South Africa has procured 1 980 MW of wind projects in two years, which has progressed the country from one 5.2 MW wind farm in Darling, in the Western Cape, to more than 20 mega wind farms of up to 140 MW. Further tender rounds under the REIPPPP are scheduled for the future.
“Wind energy prices are now very competitive, with the cheapest bid in round three of the REIPPPP being renewable-energy business and project developer Red Cap’s Gibson Bay project, in the Eastern Cape, which will be able to offer wind energy at 66c/kWh,” he explains.
He notes that the amount of electricity that will be generated by wind, once rounds two and three of the REIPPPP are completed, is still comparatively low, compared with other forms of generation, such as coal-fired power.
“However, prices are increasingly competitive and will be lower than those of State-owned power utility Eskom’s Medupi and Kusile coal-fired power plants once they are commissioned. Wind energy currently offers the lowest prices of any grid-connected renewable energy and will, therefore, constrain electricity price increases in the years ahead,” Eberhard says.
He argues that South Africa could produce more wind energy now than what will be produced after the completion of the current REIPPPP tenders. However, to use the available wind energy in South Africa better, Eberhard says, there needs to be more certainty around wind energy procurement beyond the current Ministerial determination.
“The updated Integrated Resource Plan will indicate how much wind energy will be needed through to 2030 and the Department of Energy needs to assure the industry that regular annual tenders will be issued. This will provide a more sustainable base for local manufacture of wind energy components,” he concludes.