The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Can South Africa Catch the North African Wind?

The announcement earlier this year of the renewable energy feed-in-tariff for South Africa was a progressive step by energy policy makers. The value of these tariffs even surpassed the expectations of most stakeholders involved in the renewable energy industry.

But how does South Africa’s renewable energy market match up against other countries on the African continent, specifically in the case of the wind power market? Unfortunately, the answer is "not very well."

Over 97% of the total installed wind power on the continent is installed in Egypt, Tunisia and Morocco. In 2008, 104 MW of wind power was added on the continent. Egypt, Tunisia and Morocco made up 99% of that total. To understand why the North African countries are leading the rest of the continent in wind power projects, one must appreciate the specific factors driving wind market developments in this region.

Some Drivers for Wind Power Projects in North Africa

Proximity to the European Market -- The proximity of North African countries to Europe and the growing electrical grid interconnections between these regions is one of the reasons for the strong interest in the North African wind energy market. European countries have committed themselves to meeting CO2 emissions targets and are investing resources into clean energy projects. For example, Tunisia and Italy plan to integrate the electrical grid connections between the two countries. Once the underwater connection between the countries is completed, Tunisian clean energy companies will be able to export 200 MW of energy to Italy.

High Wind Potential -- The wind speeds and wind reliability in North African countries rank amongst the highest in the world. These wind resources are exceptional, therefore this part of the continent was always a strong candidate to develop into a formidable wind power market.

Ambitious Renewable Energy Targets

  • Egypt has set a renewable energy target of 20% of electricity generation by 2020. Wind energy is expected to contribute 12% of this renewable energy.
  • Morocco has set its renewable energy target at 20% of electricity generation by 2012.
  • Tunisia has set a wind energy target of 180 MW by 2011.

These targets form part of the key incentives that project developers use to assess the level of government commitment to renewable energy projects in these countries. (See lead image for chart showing key market drivers for wind development in Africa.)

The Growth of the Egyptian Wind Market in Particular

Quick Government Thinking and Action -- With 365 MW of installed wind power, Egypt has the highest wind capacity on the continent. Measurement of the wind energy potential began in earnest in the country in 2000 and 2001. In 2001, the Renewable Energy Authority (NREA), accumulated data on the sites with the highest annual wind speeds in the country. Following this, the ministry of electricity and energy acquired more than 800 m² of land to be used to develop wind energy projects.

Strategic Alliances with International Development Agencies -- Perhaps the most important intervention of the Egyptian government was to align the country with international development agencies to assist in the construction of wind farm projects. German financier, Kreditanstalt fur Wiederaufbla (KfW), Danish International Development Agency, DANIDA, the Spanish government and the Japan Bank for International Cooperation, JBIC, form the impressive list of development agencies that have been instrumental in providing loans to the Egyptian government to develop wind power projects. Investments by these agencies will provide an injection of capital in different phases of the multi-stage Zafarana wind project in Egypt.

Wind Power Market: Installed Wind Power Capacity (Africa), 2008

Source: Frost & Sullivan

Why Has South Africa Lagged Behind?

Prior to 2006, energy intensive industries were not under pressure to reduce electricity consumption and introduce energy efficiency measures. The reliability of power supply to these industries was good and the cost of electricity lower than the global average. Thus, these industries had no reason to pressure the utility to explore alternative forms of power generation. Self-power generation projects were largely a long-term plan, and not a serious consideration.

The same holds true for domestic users of electricity in South Africa. Prior to the events in 2007/2008, South African households enjoyed a reliable supply of power and had not experienced the sweeping power outages that led to load shedding in 2007/2008.
There was therefore no public or industry pressure on the utility to explore alternative sources of power generation.

Today however, public pressure on the utility has increased from both the industrial and domestic sectors. Energy efficiency, renewable energy and DSM (demand-side management) are the hot topics of the day, which has led to the focus on renewable energy for power generation.

What Is The Role of Wind Power Projects in South Africa?

Wind energy is unlikely to form an integral part of the future baseload energy capacity in South Africa. Nuclear and coal energy will be the key components of the energy mix in the country. This is not to say that wind power projects do not have an important role in the country though.

The lower upfront capital costs for wind power projects and shorter time-to-completion lead times allow wind power projects to add additional capacity to the national grid far quicker than a new coal or nuclear energy plant can. Wind power projects have the potential to total more than 300 MW of installed capacity in the next three years. The contribution that wind power projects will make is however largely dependant on key issues such as grid capacity, private sector investment, EIA application processes and the regulatory environment in South Africa.

Wind Power Market: Key Market Drivers (South Africa), 2008

Source: Frost & Sullivan

Summary: What can South Africa Learn from North Africa?

1. Identify organizations that can assist in thoroughly assessing and addressing wind energy potential in the country. Without accurate data on the wind speed and wind variability at a specific site, equipment manufacturers, project developers and investors will not be interested in investing time and resources into a project.

One organization that has been key in the development of the North African wind energy market, is the German technical co-operation agency (GTZ). The GTZ has been instrumental in North Africa and is partnering with South Africa to support the development of its wind market.

2. Identify development finance institutions to assist in funding projects in the country.

Loans with favourable interest payments provided by Spanish, Danish, and French organisations have assisted in developing the North African wind market into the powerhouse it is on the African continent. South Africa should look to investigate similar routes of sourcing finance.

Conclusion

While South Africa might not catch up with its Northern counterparts, it certainly has all the resources necessary to develop a significant wind energy industry. The wind potential is abundant, regulatory incentives are favourable and project developers, equipment suppliers and financiers have already expressed intent to get involved in the sector. What is required now is more dialogue between the regulators of the renewable energy industry on issues such as grid stability, grid connection costs and the time frame in which these issues will be resolved. 

Sipha Ndawonde is a Energy Research Analyst at Frost and Sullivan.

This article was originally published by Sham Media Corp., publisher of African Power, Mining and Oil Review and was reprinted with permission.

Untitled Document

RELATED ARTICLES

Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

With Vast Amounts of Geothermal, Wind and Hydropower, Why No Solar In New Zealand?

James Ellsmoor, Contributor New Zealand has built an international brand on environmentalism and the great outdoors. So it is unsurprising that t...

GE low wind turbines make debut in France

Kelvin Ross

A new wind farm in France will be the first in the country to deploy GE’s 2.75-120 wind turbines.

Unlikely Allies in North Carolina Clean-Energy Fight

Mark Drajem, Bloomberg With North Carolina’s renewable energy mandate under assault from Republican legislators, green groups seeking to sav...

PRESS RELEASES

Intersolar AWARD „Solar Projects in India“ – Applications being accepted until September 18

The Intersolar AWARD in the category Solar Projects in India honors projects in the fie...

OFS Announces Commercial Availability of InvisiLight® MDU Optical Solution for Multiple Dwelling Units

OFS, a leading-edge designer, manufacturer and supplier of innovative fiber optic netwo...

New local energy partnership brings innovative solar tracker to Washington State

A new partnership will bring the innovative AllEarth Solar Tracker solar electric syste...

30 days to GRC Annual Meeting & GEA Geothermal Energy Expo

The Geothermal Resources Council (GRC) has announced that it is only 30 days to go to t...

FEATURED BLOGS

Cronimet / THEnergy study: In solar for mines size does not always matter - Reducing CAPEX with energy efficiency and load shifting

Munich, September 2015. Mining companies are constantly gaining interest in solar solutions because frequently solar ...

Final Program Now Available for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program from

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospect that owns or manages a building with high ...

Shedding Some Light on a Taxing Situation for Community-Shared Solar

For renters and for property owners with inadequate roof space, the many benefits of solar electricity may seem out o...

FINANCIAL NEWS

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Distributed Wind Energy Workshop

Description: Distributed wind energy is electricity that is produced for...

2015 AREDAY Summit

The 12th Annual AREDAY Summit, August 8-13th in Snowmass Colorado. Engag...

COMPANY BLOGS

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS