Market Trends of South Africa Wind Energy Industry
This section covers the major market trends shaping the South Africa Wind Energy Market according to our research experts:
Onshore Segment is Likely to Dominate the Market
- Onshore wind energy in South Africa will dominate the market during the forecast period. In 2021 the country's total wind energy production was about 2,956 MW, out of which 440 MW of new onshore wind installation was done in 2021.
- In December 2022, South Africa had signed legal agreements on additional 13 projects under the 5th Bid Window of the Renewable Energy IPP Procurement Programme. The program consists of 784 MW onshore wind installations out of a total of 1,759 MW renewable capacity to be developed. This will pave the way for the addition of new generation capacity by 2025.
- Additionally, in November 2022, Red Rocket Consortium signed three multibillion-rand wind project agreements worth USD 540 million. The onshore capacity of 364MW will be developed under Renewable Energy Independent Power Producer Procurement Programme and is expected to get completed in 2024. It will significantly solve the problem of load shedding and the energy crisis in South Africa.
- The South Africa Department of Energy published an integrated resource plan in 2021, which states that overall renewable energy sources will grow by 26% of total energy over the next twelve years. The country aims to reach the 11.5 GW capacity of the onshore wind segment under the plan. Thus, the onshore segment will grow during the forecast period.
- Also, with the involvement of international market players and rapid adaptation of renewables, the LCOE for wind has witnessed a significant drop, resulting in the growth of the wind market in the forecast period.
- With upcoming onshore projects and decreasing wind power costs, considerable growth is anticipated in the future.
Understand The Key Trends Shaping This Market
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Government Initiatives and Upcoming Projects to Drive the Market
- Wind energy is expected to play a critical role in South Africa's energy mix. The Integrated Resource Plan of the country envisions the addition of 14,400 MW of wind power in South Africa by 2030. It will significantly increase renewable energy generation in the country. In 2021, the total electricity generation increased by 2% from the previous year and reached about 244 TWh.
- In September 2022, The South African government declared to double the wind energy allocation under the initiative Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) 6th Bid Window to 3,200 MW. This development tackled South Africa's energy challenges and harnessed electricity from renewables.
- Furthermore, in December 2022, under the 6th Bid Window, a total of 56 wind and solar projects were submitted by potential bidders for 9,600 MW of projects. Of the 56 projects, 23 wind projects have a cumulative capacity of more than 4,100 MW.
- Similarly, In November 2021, under the Renewable Energy Independent Power Producer Procurement Program (REIPPP), South Africa picked 2.58 GW of wind and solar projects in the auction. Private developers will develop a total of 25 projects in the country.
- With active initiatives by the government of South Africa focussing on installing renewable energy projects, the wind energy market can be seen driving ahead in the future.
