Although South Africa has begun investing more into wind projects, is the country able to compete with the continents top-dogs like Egypt, Morocco, and Tunisia?
According to Frost & Sullivan energy research analyst S’pha Ndawonde, South Africa will continue to invest in nuclear and coal energy as its key components to its energy mix although wind is still considered to contribute an important role. The lower initial financing of wind projects – especially compared to that of nuclear – allow wind power projects to add additional capacity to the national grid at a quicker rate. However, Frost & Sullivan predicts that the rise of wind power projects will depend on significant issues such as grid capacity, private sector investment, EIA application processes, and the country’s regulatory procedures.
North Africa leads the way with wind powered projects for many reasons: its wind potential, close proximity to the European market, and ambitious renewable energy targets. Egypt, Morocco, and Tunisia account for 97% of the total installed wind power in Africa with each country introducing a targeted goal in order to diversify its energy mix. Egypt has set a renewable energy target of 20% of electricity generation by 2020 with wind expected to contribute up to 12% of that figure. Morocco also joins ranks with a target of 20% of renewable energy by 2012. And Tunisia has set a wind energy target of 180 MW by 2011.
Frost & Sullivan identified a couple of examples from North Africa that South Africa could learn from in order to further implement wind power projects:
•Identify organizations that can assist in thoroughly assessing and addressing wind energy potential in the country.
•Identify development finance institutions to assist in funding projects in the country. Loans with favorable interest payments provided by Spanish, Danish, and French organizations 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.
The Frost & Sullivan report concluded that, “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 favorable 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.”