Africa-Press – South-Africa. South Africa has seen a massive influx in renewable energy investments and projects over the past few years, with a massive boom in 2023.
This was revealed at the Nedgroup Pre-elections Treasurers’ Roundtable on 24 April 2024, where Nedbank economist Isaac Matshego said fixed investment spending in the country was initially stimulated by the demand for renewables.
As Eskom has struggled to meet the demand for electricity in South Africa and implemented more frequent and intense load-shedding, households and businesses have turned to alternative energy solutions.
BloombergNEF’s global PV market outlook for the first quarter of 2024 said South Africa’s electricity crisis has led to a massive solar boom.
It said the country is expected to become the world’s tenth-largest solar photovoltaic (PV) market this year.
According to the report, the global PV industry added about 444 GW of new capacity in 2023 internationally, a 76% increase from 2022.
In addition, solar module prices are at record lows, and there is a plentiful supply of components. Therefore, installations this year are expected to top 520 GW globally.
In South Africa, Eskom estimates that rooftop solar additions totalled 2.6 GW in 2023. However, the BloombergNEF database tracked an additional 676 MW. This takes the total for 2023 to about 3.3 GW.
In 2024, the report expects rooftop solar to grow, particularly in the winter months of May, June, and July, when load-shedding is more frequent and severe.
Residential demand for solar is linked directly to load-shedding and slows down as soon as load-shedding stops. The report also expects business adoption of rooftop solar to accelerate.
Renewable energy solutions are also being implemented in large-scale projects, with 6.28 GW of renewable energy capacity installed in 2023 and a further 2.4 GW of projects registered with NERSA.
For perspective, Eskom’s second largest power station, Majuba, has an installed capacity of 4.11 GW.
Matshego said that after the Covid-19 pandemic, the government opened up the economy, allowing for significantly more fixed investment spending that was initially stimulated by the demand for renewables.
Nedbank invests billions
Nedbank has also increased its green finance pipeline to more than R10 billion in light of the government having lifted restrictions to help resolve the country’s energy crisis.
“There are very strong pipelines currently in our business and across the country for private sector generation – that is a very large growth sector in an otherwise challenging growth environment,” outgoing Nedbank CEO Mike Brown said.
“It is probably going to take two to three years before that connects to the grid and fixes the problem.”
President Cyril Ramaphosa scrapped a 100 MW limit on embedded generation in July 2023, allowing companies and households to produce electricity without a license to meet their own needs and sell to the grid.
The state also doubled renewable-energy procurement to 5.2 GW under Bid Window Six to help accelerate the country’s transition from a dependence on coal for more than 80% of its power toward greener energy sources.
South Africa still has enormous potential despite the “material challenges in the short-to-medium term,” according to Brown.
“It’s a country that has some of the top 10 mineral deposits in those minerals that are so necessary for growth around the world,” Brown said.
“We’re a gateway to Africa. So, while we certainly do have short-term challenges, I’m extremely bullish about the long-term potential of our country.”
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