South Africa’s energy resource is dominated by coal-fired generation stations with a net output of 37.8 GWp, which represents more than 90% of the country’s total installed capacity of over 45 GWp. Renewable Energy (RE) is still a new sector in South Africa, with the first commercial utility projects initiated in 2013 and it merely accounts for 5% of South Africa’s electricity. The South African renewable energy sources are dominated by solar photovoltaic (PV) and wind and are backed by a growing small-scale embedded generation market (mostly solar for commercial and industrial businesses). At the time of writing this report, 3.8 GW of RE is commercially operating, of which the three main technologies are concentrated solar power (CSP), solar PV, and wind.

The Renewable Energy Independent Power Producers Procurement (REIPPPP) was established in 2010 and it represents the country’s most comprehensive strategy to date in achieving the transition to a greener economy. The programme has been designed to contribute to the development of a local green industry and the creation of green jobs.

The programme seeks to procure energy from small scale (Independent Power Producers) IPPs, with projects that generate between one Megawatt (MW) and five MW of energy from solar, wind, biomass and landfill gas projects. Through the REIPPPP, the Department of Energy (DoE) is targeting the procurement of 13 225 MW from IPPs by 2025. The IPPs, with the support of the DoE, has procured 6 376 MW of energy to date. This has been managed through bid rounds in the small and large REIPPPP bid windows. To date, the programme has attracted more than R200 billion in investments, of which R48.7 billion is foreign equity and financing activities. 

Specific to the procurement of new generation capacity, South Africa is guided by National Development Plan, the IRP 2010-2030 (most recently, draft Integrated Resource Plan (IRP) 2018), which stems from the broader national energy plan, embodied within the Integrated Energy Plan (IEP) and RE White Paper. NDP proposes that gas and other renewable resources like wind, solar and hydro-electricity will be viable alternatives to coal and will supply at least 20 000 MW of the additional 29 000 MW of electricity needed by 2030. The draft IRP 2018 allocations indicate 8 100 MW for wind, 5 670 MW Solar Photovoltaic (PV) and 2 400 MW of small-scale embedded generation (SSEG) to be procured by 2030, which has the potential of attracting in excess of R200 billion in the next 12 years.

DoE goals beyond 2020 include contracting more than 20 000 MW of renewable energy, including an increasing share from regional hydro-electricity. To fulfil the requirements of the economy without compromising government’s commitment to sustainable development, the department is pursuing a balanced mix of energy that includes clean and renewable resources, as stipulated in the IRP. The draft IRP 2018 update calls for more renewable energy contribution through Independent Power Producers and the decommissioning of more coal-fired power stations by 2030. It envisions additional generation capacity by 2030 of 8100MW each from wind and gas, 2500MW from hydropower and 5670MW from photovoltaic. The country supports research, technology development and special measures aimed at environmentally sustainable economic growth.

Dear Honourable Minister Gwede Mantashe,

Assuming that all 8100MW of new procurement is achieved by 2030, this means that wind will make up just more than 15% of the country’s power mix bringing onshore wind to 11442MW in total. Finalisation of the IRP is important for policy certainty and investment attractiveness in renewable energy resources projects. The IRP 2019 update must be finalised and published, with a commitment to regular annual updates, moving in line with technological and economic changes. The transition to renewable energy could result in a cheaper, cleaner and more reliable electricity supply for South Africa according to the study undertaken by the University of Cape Town’s Energy Research Centre.

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Department of Energy

Private Bag X96

Pretoria  0001

Tel: +27 12 406 8000

Learn more

See an overview “draft IRP 2018”, http://www.energy.gov.za/IRP/irp-update-draft-report-2018.html

https://www.investcapetown.com/wp-content/uploads/2019/04/GreenCape_Market-Intelligence-Report_-Renewable-Energy-2019-1.pdf