HomeNewsSA’s onshore wind market valued at US2.3 billion

SA’s onshore wind market valued at US2.3 billion

South Africa’s onshore wind market has attracted global interest, with some 2,000 MW of approved capacity to date. Head of sales, Middle East and Africa at Siemens, Tom Krojgaard Pedersen, says the supply chain in the sector and that the wind industry can have the 2,000 MW in the ground by 2017.

Chief engineer of power delivery engineering at Eskom, Riaan Smit notes that currently there are a large number of projects and large number of potential developers present in South Africa. “I think that we need a consolidation of stronger developers in order to create a more sustainable development pathway. Right now the interest in South Africa is so high that it could most likely service the next 20 years of potential programmes. The reality however, means that not all the potential developers will survive.”

Lessons learned from bid window’s one to three will also allow for rule changes, high local content and an acceptance of a sustainable programme. The end result of this will be a more sustainable industry.

Director of G7 Renewable Energies, Dr Kilian Hagemann says that to date the biggest challenge has been dealing with opposition from certain stakeholders in projects. “When I say this I’m talking in a very broad sense as it normally boils down to individual people objecting to the proposed projects which then formalise in appeals on the Environmental Authorisations. This has definitely been the biggest challenge over the past two years. It can be dealing with neighbours that don’t like the sight of the turbines or the noise they’re expected to make and so don’t want them near their land. There is a large case of classic NIMBYism here (not in my back yard mentality) where many people support renewable energy in South Africa but don’t want it anywhere near their land.”

He goes on to say that in his eyes the gold rush days of the wind sector in South Africa are over. “It’s become so competitive that people realise if you don’t have a deep pocketed partner who will finance on very competitive terms or a very good wind resource then you don’t stand much of a chance in the bidding. That said, ideally, you’d need both of those winning ingredients to be successful. Increasingly we are seeing that this is a big boy’s game and the number of small developers has fallen drastically with more of our peers closing shop as I speak. There are a couple of small developers with very good projects who will continue in the market but I think the future of South African wind lies with the larger companies.

“In terms of pricing, I believe that by the time we have round four the prices won’t keep falling. They will either stabilise at this current level or they’ll go up slightly.

We have reached what I believe to be rock bottom in terms of where prices can go, unless something unforeseen happens in the international turbine market. The rest depends on what the government does – if they’ll increase the allocations remains to be seen. Wind definitely has a very strong role to play in South Africa’s energy mix over the next 20 years and it is here to stay as a mainstream technology, considering it is now the cheapest form of new electricity generation capacity at an average R0.74/kWh seen in round 3 of the Renewable Energy Independent Power Producer Programme (REIPPP). And as the first couple of projects are being built they are creating a very nice track record of showing that this can be done on time, within budget and with some very positive socio-economic spin offs.”


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