Investment & Finance
South Africa to add 6,8GW in new renewables capacity over the next year
The procurement of new renewable energy capacity is in line with the country’s energy plan, the Integrated Resource Plan
South Africa plans to procure 6.8GW of new renewable energy capacity over the next year, as well as a combined 5GW of new coal, gas and storage, a presentation by the governing party ANC showed. The 6,8GW will be procured in three rounds of the country’s renewable energy independent power procurement programme (REIPPP).
The most industrialised nation in Africa is looking to reduce its heavy reliance on coal fired power generation systems and move to a more diversified and environmentally friendly energy mix.
South Africa has been experiencing regular power outages as a result of faults at ailing state-owned utility Eskom. Eskom’s aged coal fired generation fleet has not been able to consistently guarantee a stable power supply with the utility reporting recurrent breakdowns. The effects of load shedding have significantly deterred investment in the country and hobbled economic growth.
The government hopes to attract investment in the renewable energy sector to spur some much needed growth and ensure consistency in energy supply to support its economic growth objectives.
A presentation made at a three-day meeting of party officials and allies in January showed the ANC planned to launch the first renewables round around March for 2.6GW of wind and solar, with another 2.6GW round in August and a third for 1.6GW in January or February 2022.
Coal to remain part of South Africa’s energy mix
Procurement of roughly 500MW of energy storage would start around September, followed by rounds for 1.5GW of coal and 3GW of gas around December. The coal is contentious as the country is a major polluter, and banks are increasingly reluctant to lend to coal projects because of environmental concerns.
Eskom is also finalising the full operatisation of its behemoth coal power plants, Medupi and Kusile in 2020 and 2023 respectively.
The capacity envisaged by the ANC is in line with the country’s Integrated Resource Plan, a government document that lays out the power mix until 2030. A 2019 update of the plan contained big allocations for wind and solar but also included new coal, which some analysts said was an attempt to placate lobbyists for the fuel.