SA’s renewable energy sector experienced a rapid expansion in 2023 with exponential growth in both small-scale embedded generation such as solar panels installed by households and businesses, and the registration of large-scale generation projects, writes Business Day.
Since its inception, the government-backed renewable energy independent power producer procurement programme has generated more than R200 billion in investment and according to the Minerals Council of SA there were about 100 private offtake renewable projects worth R150 billion in the pipeline in various industries.
Large-scale generation projects registered with the national energy regulator soared to about 4,500MW in 2023, up from 1,600MW worth of projects in 2022 and 2021.
The high demand for renewable energy projects, driven by the energy crisis and moves by the government to liberalise the electricity trading market in SA, has resulted in a positive shift in private investor sentiment in SA.
EDF Renewables is playing a pivotal role in South Africa's transition to renewable energy with an extensive construction programme.
The company is constructing nearly 1.2GW of low-carbon power capacity, including wind, solar, and battery storage, across eight sites in the Northern and Eastern Cape regions.
The programme, developed in collaboration with key partners, secured financial agreements between November 2022 and February 2024.
EDF Renewables' projects are swiftly progressing to address South Africa's energy deficit.
Key projects include:
Koruson 1: A cluster of three wind farms with a total capacity of 420MW, developed in partnership with H1 Holdings, GIBB-Crede, and a local community trust.
Koruson 2: A collaboration with Anglo American via their joint venture Envusa Energy, featuring wind and solar farms with a total generation capacity of 520MW.
Umoyilanga Hybrid Power Plant: A partnership with Perpetua Holdings, combining solar, wind, and battery storage to deliver 75MW of dispatchable power.
The combined investment for these projects amounts to R34 billion, with construction targeting commercial operation between 2024 and 2026. Once operational, they are expected to provide close to 4TWh of low-carbon power annually, significantly contributing to the national grid.
These initiatives mark a notable acceleration in renewable energy deployment, addressing Eskom's reported energy shortage in 2023.
Additionally, they stimulate job creation, support local businesses, and prioritize socio-economic development in nearby communities.
Business Day interviewed Abi Mustapha-Maduakor (AMM), CEO of the African Private Capital Association, and Vivek Mittal (VM), CEO of the Africa Infrastructure Development Association, to delve into the factors influencing private investment in infrastructure in South Africa and other African regions.
Mustapha-Maduakor pointed to the significant value of infrastructure deals in 2023, with a focus on energy and transportation investments across Africa.
He noted that infrastructure attracted the largest value of deals, with investments primarily directed towards transport, utilities (water and electricity), and renewable energy projects.
The surge in renewable energy investments has notably contributed to South Africa's attractiveness to investors, marking a rebound in investor interest in the region.
Looking ahead, Mustapha-Maduakor stressed the potential for privatising public assets to enhance their efficiency and performance, highlighting the critical role of the private sector in infrastructure improvement.
He suggested that leveraging private sector capital could optimise the functionality of public assets, potentially mitigating issues such as load-shedding.
Addressing concerns about the depth of South Africa's project pipeline, Mittal highlighted infrastructure investment shortfalls across Africa, attributing them to prolonged project development processes and inadequate ecosystem development.
Despite these challenges, Mustapha-Maduakor expressed confidence in the sufficiency of the project pipeline, citing substantial investments in energy projects and the presence of infrastructure fund managers operating in Africa.
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