High costs stall South African renewable energy projects
South African renewable energy projects selected over a year ago to add generation from private producers and help end electricity shortages are struggling to reach financial close due to an escalation in costs, according to one of the developers.
A dozen projects, with a combined capacity of more than 1,000 megawatts, remain hamstrung because of increases in financing and other charges, said Globeleq Inc CEO Mike Scholey. The government announced the preferred bidders in October 2021 in the nation’s fifth bid round.
“In South Africa we’re struggling to deliver due to costs,” he said in an interview on the sidelines of the Africa Energy Forum in Nairobi.
The delays come as the most industrialized nation on the continent suffers from record power cuts due to breakdowns of state-owned Eskom Holdings’s mainly coal-fired units. Performance has deteriorated even as the government outlines measures to improve the situation.
Projects have also been sidelined due to a lack of connections to the national grid. Wind stations were spurned in the sixth round, limiting projects advancing to the next stage as a lobby for the technology warned that the problem could limit investment.
For Globeleq, selling the electricity to private consumers rather than Eskom is one potential solution, Scholey said. “In the short term, this is the way forward: allow direct sale to end-use customers.”
The company won the preferred bids in the fifth round as the majority partner in the Ikamva Consortium, which includes Mainstream Renewable Power, Africa Rainbow Energy & Power and H1 Holdings.
Comments
Research Reports
Projects
Latest Multimedia
Showroom
Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
