Friday 9th May 2014


April 9, 2014

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Wind Watch

South Africans went to the polls this week in a highly significant set of elections.

These are the first since the death of Nelson Mandela in December, and the first “born free” elections. This means some voters have never lived under apartheid.

The result is also set to have ramifications for those in the country’s wind sector.

The African National Congress (ANC) is expected to win for the fifth time running, although the results are not yet in. But don’t let this fool you into thinking everyone loves the ANC. The party is being dogged by scandals and economic difficulties.

One of its most pressing challenges is to fix the energy system. South Africa is not generating enough energy, and there were rolling blackouts in March when heavy rain made coal supplies too wet to burn at some of its power stations.

This makes it sound like the country should be whole-heartedly embracing renewable energy sources. Alas, it isn’t that simple.

Yes, South Africa’s wind sector is growing. It had just 10MW of wind capacity installed at the start of this year, and the Global Wind Energy Council expects installations of up to 1GW this year. South Africa also has a target of developing 5GW of wind power by 2019.

It is good to see wind finally taking off in South Africa.

But most of its political leaders still see wind as a marginal concern. The ANC is keeping faith with coal despite the blackouts as it wants to exploit the country’s huge reserves. South Africa has the seventh-largest coal reserves in the world and gains more than three-quarters of its primary energy from coal. The ANC wants to make sure it extracts maximum value from this ‘black gold’.

This is why state-owned electricity utility Eskom is building the third- and fourth-largest coal-fired power stations in the southern hemisphere, called Medupi and Kusile, with total capacity of 9.6GW. They are due to start producing power this year, and a third plant of a similar size – Coal 3 – may follow.

Wind may be of little interest to Eskom or leaders with vested interests in the coal sector. But the election should still give hope to wind developers and investors.

We should not forget that the Department of Energy is providing support to the sector with mechanisms like its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). It is vital for South African wind businesses to demonstrate the value of the first wave of wind farms if support is to continue.

The industry should also be able to benefit from a public backlash where people are demanding a stable energy system by the time of the next elections in 2019. Companies in the wind sector should be able to demonstrate how wind farms can help make the energy network more diverse – and help to keep the lights on.

The ANC will come under major pressure to deliver a more stable and secure energy network. This gives an opportunity for those in the wind sector.

Yes, some prominent ANC backers have vested interests in coal, but ANC leaders also have a vested interest in getting re-elected. Energy security will be vital.

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