The program has already supported the largest PV plant in Africa at 75 MW, as well as the first concentrating solar power (CSP) plants in Sub-Saharan Africa, which are under construction.
Citing the nation’s renewable energy solicitations, Frost & Sullivan (Mountain View, California, U.S.) forecasts that renewable energy will grow from 1% of South Africa’s energy supply in 2012 to 12% in 2020.
The Renewable Energy Power Purchase Agreement (REIPPP) aims to procure 3.725 GW of electricity from renewable energy by 2020. The program has already supported the largest PV plant in Africa at 75 MW, as well as the first concentrating solar power (CSP) plants in Sub-Saharan Africa, which are under construction.
“In the light of electricity and water scarcity, as well as rising coal prices, RE is becoming a preferred choice of energy generation technology in South Africa,” said Frost & Sullivan Energy and Environmental Research Analyst Joanita Roos.
“Additionally, South Africa is the 12th highest carbon-emitting nation, and the need to diversify industries and incorporate lower carbon-emitting technologies will spur RE development.”
Frost & Sullivan notes that under the REIPPP various renewable technologies must meet minimum annual targets in order to stimulate local manufacturing and services.
However, it states that parameters for each technology will need to be defined individually, and cautions that local industry may lose momentum if there is not certainty over local content requirements.
The firm also warns that financial restraints owing to steep initial capital as well as legal and technical project costs impede renewable energy industry expansion in South Africa, as does a shortage of skills and experience in the local renewable energy industry.
Some of the larger renewable energy projects in South African have been supported by partnerships with European and international development banks, often in partnership with local banks.