South Africa added 515 MW of new wind capacity in 2020 cementing its wind leadership on the African continent, a new Global Wind Energy Council (GWEC) analysis shows.
By the end of last year, South Africa had 2 500 MW of cumulative wind capacity installed, representing about 34% of the 7 300 MW of capacity installed across Africa and the Middle East.
In total 821 MW of new wind power capacity was installed in Africa and the Middle East last year, with South Africa followed by Senegal (103 MW), Morocco (92 MW), Jordan (52 MW), Iran (45 MW) and Egypt (13 MW).
The two regions represent only a fraction of the total market, with global additions of about 70 GW in 2020 and with the cumulative installed base expected to grow to about 800 GW this year.
In fact, GWEC note that Africa is exploiting only 0.01% of a technical wind resource that has been estimated to be 59 000 GW by the World Bank’s International Finance Corporation.
The outlook for capacity additions in South Africa for 2021 is not as strong, owing to the fact that there will be a gap between the deployment of wind capacity procured as part of the much-delayed fourth bid window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and projects that are still to be procured as part of the upcoming fifth bid window.
Nevertheless, GWEC director Emerson Clarke stresses that the medium-term outlook is positive in light of the South African government’s confirmation that the fifth REIPPPP bid window is to be launched during March and will be followed by back-to-back auctions in August and in March of 2022.
Mineral Resources and Energy Minister Gwede Mantashe has confirmed that 2 600 MW of new wind and solar photovoltaic (PV) capacity will be procured in each bid window, with wind making up 1 600 MW of the allocation.
Procurement will be conducted in line with both the Integrated Resource Plan of 2019, which envisages the installation of more than 14 000 MW of wind by 2030, as well as the associated Ministerial determination, which has created the framework for 4 800 MW of wind over the coming three years.
It is also likely that wind will feature in the 2 000 MW emergency procurement programme, the preferred bidders for which will also be unveiled in March.
South African Wind Energy Association CEO Ntombifuthi Ntuli says the policy uncertainty that has afflicted the wind sector since 2015, when Eskom defied official policy by refusing to enter into power purchase agreements with renewables independent power producers, has been addressed and the industry is currently making preparations for a resumption in procurement.
“Our biggest barrier over the past five years has been policy uncertain, but I would say that, at this point, we have seen government working very hard to resolve that uncertainty. We think the policy environment is now conducive to attract investment and to grow the size of the wind market.”
She cautions, however, that some local capacity has been lost as a result of the six-year hiatus and that wind developers are, thus, having to assess what localisation commitments will be feasible, especially during the fifth bid window.
Should the procurement programme settle into the regular rhythm outlined by Mantashe, Ntuli is confident that the domestic market will be of a sufficient size to attract original equipment manufacturers.
The South African Renewable Energy Masterplan is in the process of being finalised and is likely to outline those inputs, such as towers, that could be localised relatively quickly, as well as offer an indication as to what would be required for investments in other components, such as blades and nacelles.
“With procurement being quite imminent, we expect that local-content requirements will feature very strongly and, as the industry, we are having discussions to figure out how to meet minimum requirements, at least for the first round.
“But the market looks conducive to attract sufficient investment to increase local content going forward.”