With renewable energy being a strong supplementary aid in addressing South Africa’s energy challenges, the industry expects an extreme upward trend in renewable energy adoption in 2022.

Not only can renewable energy get to grid fastest, it offers the lowest levelised cost of energy. The greatest challenge will be overcoming transmission bottlenecks, with the industry expecting significant consideration given to transmission enhancements over the next year.

Renewable sector performance in 2021

Reflecting on notable developments in the renewable sector in 2021, William Price, country manager for Enel Green Power South Africa (EGP RSA), says many of the renewable projects of the country’s Renewable Energy Independent Power Producer Programme’s (REIPPP) bid window 4 came to fruition throughout the year - with certain projects going online even in 2022 - and began to produce energy to the grid.

“In addition, a new risk mitigation tender, initiated by the Department of Mineral Resources and Energy, was a departure from the norm in that it placed fossil fuels, renewables, and other forms of electricity generation on a level playing field - the different technologies all participated in one bidding round, which wasn’t done before. Several renewable energy projects were selected for the tender, demonstrating that renewables can successfully compete with fossil fuels.

“Another unique aspect of the tender was that many of the preferred bidders selected were hybrid offerings that combined different technologies such as wind, solar and battery storage,” he adds.

A further development in 2021 was the announcement of bid window 5 for the procurement of 2,600 MW of renewable energy in March – split between wind (2,600 MW) and solar (1,000 MW). The Department of Mineral Resources and Energy announced the 25 preferred bidders at the end of October 2021, marking a period of renewed activity for the industry.

“The industry has been characterised by slow progress to date, with four to five years between bid rounds. But, sentiment around renewable energy seems to be shifting – especially in light of the recent loadshedding – and it is regarded as a highly viable solution to South Africa’s energy supply woes,” notes Price.

Transmission restrictions took centre stage this year as one of the greatest challenges for the industry. This relates, in particular, to the transmission of energy from the Northern Cape, which is a good source of renewable energy, primarily solar energy, but where transmission lines to the grid are constrained. Ultimately, to reduce the cost of tariffs, it is deemed better to spend money on infrastructure in these resource rich areas.

Price says overall, 2021 has been a ‘catch-up’ year for the industry – recovering from the impact of 2020, which was characterised by stop/start delays in response to the pandemic-related lockdowns and restrictions.

“During the initial hard lockdown period, construction was forced to shut down. The pandemic had an extreme impact on projects: transporting people between provinces became difficult, as did the transporting of experts and commissioning teams from other parts of the world.

“In our (EGP RSA) case, one of our electrical contractors went into business rescue, which meant having to find a new contractor. What is commendable is that several projects have been able to go online this year, even with the industry in recovery mode and the COVID-19 pandemic not behind us yet,” he adds.

A year of solidification for EGP RSA

Honing in on EGP RSA’s performance, Price says the business was able to make progress on several projects in 2021 and is grateful to Eskom for its cooperation while doing grid testing.

“Our Oyster Bay wind farm reached commercial operation in June this year, which brings the number of operational EGP RSA wind and solar sites in South Africa up to 9 projects, with an overall installed capacity of more than 800 MW,” he says.

In addition, the business erected concrete towers instead of pre-fabricated steel towers at its Garob wind farm. This was after the successful implementation of the new concrete tower technology at its Nxuba wind farm in 2020.

The process – which involves a pre-assembly stage of installing 17 tower keystones sections, followed by the main erection, which includes the installation of the remaining five tower sections to make up one full tower – relied heavily on local contractors and community members for completion.

EGP RSA was the only IPP to have five large wind projects under construction simultaneously this year, which is unprecedented in South Africa.

“We had five projects in execution in different areas of the country. The complexities were such that we were not only building these projects, but building them within the constraints of a pandemic environment. We had to ramp up our workforce, manage the loss of a contractor due to business rescue and still complete the projects in a timely manner, within budget and to high quality standards,” says Price.

And, EGP RSA did this without any lost-time accidents. “Safety is incredibly important to the business and we pride ourselves on our safety record. It bears testimony to the men and women who work on the sites and their desire to work in a safe environment. Not only have they consistently complied with existing safety procedures and protocols, but they have had to embrace a whole new set of protocols relating to Covid-19.”

Notably, EGP RSA will approach an important milestone this year: 1 GW of generation capability. “We will be the first IPP to achieve this milestone and we expect to reach 1.2 GW next year when all 12 of our projects (seven wind and five solar) are up and running,” adds Price.

On the cards for the industry in 2022

Looking ahead to 2022, Price says the industry expects a greater degree of consistency with regard to tenders. “The demand for energy, combined with Eskom’s current challenges and its expected unbundling, will inform the year ahead.

“Government has announced bid windows 5, 6 and 7 and we’re seeing some improvements in local content and manufacturing capability – where previously the four-year hiatus of the REIPPPP meant that most of the operations that could supply key components such as solar PV panels, switchgear and transformers either had to close down or move their factories elsewhere.”

Growth in these areas is good news. “The cost of transporting equipment from other countries to South Africa has increased significantly over the past year or two. Even if equipment is manufactured more cheaply further afield, transport costs can be prohibitive. When it is manufactured locally, the industry can mitigate for time delays and other logistics challenges,” notes Price.

Another development expected by the industry is a higher demand for the core services required to run the plants such as cranes to do assembly work and transportation equipment, as well as the technical capability to handle switchgear works and transformer testing.

EGP RSA to focus on growth

In 2022, EGP RSA will focus on bringing its pipeline of projects that are in development stage to fruition. “We have large growth expectations in South Africa and will continue to submit our bids for tenders in order to grow to the next level, and we will seek other ways to sell the energy from our projects, for example, in commercial & industrial applications.”

Elaborating on transmission constraints, he says one of the ways to help with this is to employ strategic places throughout the country. “I believe we will see some storage implementation in 2022 – this means large batteries for storing energy to help with the transmission constraints. In this respect, EGP RSA has in-house experience and is well positioned to bid on and implement storage projects in 2022.”

Commercial & industrial projects are another big focus for the business. “Producing energy at source is an excellent way to minimise transmission congestion. This year has seen a large push for this type of generation with government announcing 100 MW cap for embedded generation (as opposed to 1MW),” says Price.

“There is no doubt that the industry overall and EGP RSA in particular are anticipating an interesting and fruitful year ahead. 2022 looks set to be a year of growth and greater renewable adoption, which we believe is excellent news for the country and for the planet,” concludes Price.