SAWEA CEO Niveshen Govender
Wind projects with a combined capacity of 984 MW have been registered with the National Energy Regulator of South Africa (Nersa), a development that the South African Wind Energy Association (SAWEA) sees as representing a shift from the single buyer model that has hitherto underpinned renewables investment to a more open arrangement.
The change, SAWEA says, has been brought about by the removal of the licensing requirement for private generation plants that are proceeding on the basis of bilateral power purchase agreements with private offtakers.
Prior to this development, 3 442 MW of wind was procured through the country’s public procurement process, although not a single wind project progressed to preferred bidder status following the sixth bid window, after Eskom claimed that the grid capacity on which the projects were premised had been absorbed.
It has been reported that the pipeline of private wind and solar projects currently stands at above 9 000 MW, while analysis by Trade & Industrial Policy Strategies senior economist Gaylor Montmasson-Clair shows that 2 500 MW of such projects were registered with Nersa in the first quarter of 2023 alone.
SAWEA believes that both private and public markets are required to significantly increase the penetration of renewable energy and that the development of the private offtaker market represents a maturing of the industry.
“The private offtaker market model is very different to the public programme and, together, these two structures will allow for the procurement of new capacity to meet the need of the country as a whole, and to facilitate the implementation of the targeted energy mix,” SAWEA CEO Niveshen Govender says.
“Tariffs in the private PPA market will be determined by bilateral negotiations between willing buyers and willing sellers,” Govender adds.