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Global wind body sees South African market returning to ‘full health’ in 2018

Global wind body sees South African market returning to ‘full health’ in 2018

Photo by Enel

25th April 2018

By: Terence Creamer

Creamer Media Editor

     

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The Global Wind Energy Council (GWEC) expects the South African wind market to return to “full health” in the coming year, following more than two years of uncertainty.

The council’s latest Global Wind Report, which deals with market developments for 2017, notes that the South African renewable energy sector has been through “challenging times”, owing to a long-running dispute with Eskom over the signing of power purchase agreements (PPAs) for projects procured in 2015.

The report, which was released this week, states that the dispute delayed investments of R58-billion rand and the creation of 15 000 jobs and affected 12 wind projects, with a combined capacity of 1 372 MW, procured during Bid Window 4 of the Renewable Energy Independent Power Producer Procurement Programme.

“The good news is that South Africa’s very successful procurement programme is moving forward again under its new President [Cyril Ramaphosa], and wind and other renewables will play an increasing role in South Africa’s energy future.”

To date, Ministerial determinations for 6 360 MW of wind capacity have been published by the South African government, of which 3 357.3 MW has been procured.

Notwithstanding the standoff with Eskom, South Africa added a total of 618 MW of new wind capacity to its grid in 2017, raising the country’s cumulative wind capacity to 2 085 MW. In 2017, South Africa’s wind fleet of 961 turbines, produced 5 046 GWh of electricity, or 2.1% of consumption.

South Africa also forms part of a group of 30 countries that had more than 1 000 MW installed by the end of 2017. Nine of these countries – China, the US, Germany, India, Spain, the UK, France, Brazil and Canada – had more than 10 000 MW of installed capacity, with China expected to breach the 200 000 MW mark in 2018.

The global wind industry added 52.5 GW last year, down from additional of 54.6 GW in 2016, the report states, with cumulative installations rising to 539 GW.

South Africa’s 2017 installations were also the only new additions recorded for all of Africa and the Middle East last year. At the end of the year, over 99% of the region’s total wind installations were spread across ten countries, including South Africa, Morocco (787 MW), Egypt (810 MW), Tunisia (245 MW), Ethiopia (324 MW), Jordan (119 MW), Iran (91 MW), Cape Verde (24 MW), Kenya (26 MW), Algeria (10 MW) and Israel (6.25 MW).

However, GWEC forecasts greater activity in 2018, with Kenya’s Lake Turkana project expected to come on line and with the build-out associated with Morocco’s 2016 tenders to be completed during the year. “In addition, we may see the first construction in Egypt since 2015.”

However, the “big news” for the region was South Africa’s pledge to honour tenders from 2015, with Energy Minister Jeff Radebe having presided over the signing of outstanding PPAs on April 4.

“Overall, we expect about 9 GW to be installed in the Africa and Middle East region over the coming five years, reaching a cumulative total of 14 GW by the end of 2022,” GWEC states.

GWEC secretary general Steve Sawyer also underlines material falls in onshore and offshore prices during 2017, which he argues has resulted in wind power emerging as the “most competitively priced technology in many, if not most markets, worldwide”.

“Markets in Morocco, India, Mexico and Canada range in the area of $0.03/kWh, with a recent Mexican tender coming in with prices well below $0.02/kWh,” Sawyer notes.

In addition, offshore wind had its first “subsidy-free” bids in 2017, with tenders for nearly 2 GW of new offshore wind released in Germany and the Netherlands receiving no more than the wholesale price of electricity.

A record 4 334 MW of new offshore wind power was installed across nine markets in 2017, a 95% increase compared with 2016. The report states offshore wind capacity rose to 18 814 MW, across 17 markets, in 2017.

Edited by Creamer Media Reporter

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