South Africa risks missing out on the full financial benefits of renewable energy due to delays in the rollout of Renewable Energy Independent Power Producer Procurement Programme (REI4P) projects.
This is according to the latest report from the National Energy Regulator of South Africa (NERSA), Monitoring performance of renewable energy power plants: Progress and performance in 2024 (Issue 25), which shows that, despite continued reductions in the cost of solar and wind technologies, the contribution of renewables to the energy mix declined slightly in 2024. Coal-fired power, meanwhile, remained dominant.
Data shows that renewable energy sources produced 17 609 GWh in 2024 – down from 17 800 GWh in 2023. Improvements in total system energy output were largely attributed to increased performance by coal power plants, which continued to account for 82% of South Africa’s electricity supply.
“It is evident from the levelized cost trends of solar photovoltaic (PV) and wind technologies that there has been a significant decrease over the past 10 years, which could mainly be attributed to capital cost reductions of these technologies,” NERSA says.
The cost of utility-scale solar PV projects fell by 85% between 2010 and 2022. NERSA notes that these downward trends are expected to continue, potentially resulting in further cost reductions in future bid windows under the Integrated Resource Plan 2019 framework, particularly for capacity additions between 2026 and 2030.
However, rollout delays persist. Of the 25 projects procured under Bid Window 5 of the REI4P, only 11 reached financial close by the end of 2024. Bid Windows 6 and 7 are still waiting for licensing approvals.
To date, the Department of Electricity and Energy has procured 10 731 MW from 145 renewable energy independent power producer projects, NERSA reports.
“Despite past delays in introducing renewables in South Africa, deployment of large-scale renewable energy into the South African power grid is progressing well,” the report says.
