The Future of Solar Energy in the South African Context

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  • Solar energy has come a long way in the last few years.
  • A decade ago, the global market was not only small, it relied heavily on governmental support and subsidies.

Fast forward to 2019 and the International Energy Agency (IEA) says that more than 115 gigawatts (GW) of solar were installed across the world in 2019. This is more than all other generation technologies put together, writes Tiaan Hendriks, National Sales Engineer at SEM Solutions.

According to research by Bloomberg NEF, “wind and solar energy are now the least expensive forms of power in two-thirds of the world”.  The same research states that “wind and solar will undercut coal and gas ‘almost everywhere’ by 2030”.  In countries like our own, solar is increasingly gaining popularity due to low cost and it is seen as one of the most affordable forms of new electricity generation.

Looking into the future, we can anticipate that advances in technology will make solar more affordable – likely making it the most widely used form of energy across most of the world. Last year the adoption of Photovoltaics (PV) reached the 100GW mark globally – the highest number yet. This was certainly driven by an 80% fall in solar prices since the mid to late 2000s.

The growth of solar is deeply encouraging, but its success to date is still not enough to meet the IEA’s sustainable development target of 300GW of renewable energy capacity annually between 2018 and 2030.

COVID-19 has also had a dramatic impact on the renewable energy market with the IEA stating “additions of renewable electricity capacity will decline by 13% in 2020 compared with 2019, the first downward trend since 2000. This is a 20% downward revision compared to our previous forecast in which 2020 was due to be a record year for renewable power. The update reflects both possible delays in construction activity due to supply chain disruptions, lockdown measures and social distancing guidelines, and emerging financing challenges.”

It is highly likely that the delayed projects will come back online in 2021 and this will bring the targets closer to where they should be, but they won’t be what they would have been if the pandemic had not happened.

IEA’s revised forecasts for 2020 and 2021 show that distributed PV systems (those used by SSEGs) have been badly impacted and will be 36% lower, whereas the utility scale PV projects have not been that affected, mainly due to “larger pipelines of utility-scale projects prior to COVID-19” that “underpin more optimistic growth”.

However, the need for clean, stable energy is as important as ever, especially in South Africa with the promise of loadshedding looming and an economy battling to navigate through this pandemic. So, what can South Africans expect in the near future when it comes to energy alternatives?

Wholesale energy market

Our government sees the deregulation of private sector power generation and the ramping up of licenced independent power producers (IPPs) as crucial to South Africa’s energy security as evidenced by Eskom’s plan to procure 5,000MW of additional generation capacity, including 2,000MW emergency power by December 2021[1]. Currently Eskom still supplies more than 90% of the country’s electricity[2] whereas this sort of energy monopoly is uncommon by international standards. While South Africa is starting to deregulate energy generation and establishing its wholesale energy market, other countries are transitioning to highly competitive retail markets where energy generator and energy supplier does not necessarily refer to the same entity. In these markets, the end user can choose who supplies the energy and how the energy is generated[3].

Allowing large power users to generate power for their own use is a step in the right direction with the possible outcome of opening the market to multiple power generators, wholesalers and retailers. This will bring competitiveness to the industry, driving down costs and improving transparency.

As a country, South Africa has been viewed as one of the largest solar markets on the continent. This is borne out by the fact that the country’s installed PV capacity of 2.5GW is definitely the biggest in Africa regarding operational solar systems. However, our market is not growing as fast as the market in Egypt.

According to the IRENA (International Renewable Energy Agency), “The Big 5 – Africa’s fastest growing solar energy markets”, report published at the end of 2019, growth was primarily driven by: Egypt, South Africa, Kenya, Namibia and Ghana during 2018. While these countries contributed 1,067MW of newly-installed PV capacity, Egypt alone contributed 581MW, while South Africa added 373MW.

The Department of Mineral Resources and Energy (DMRE) announced the NERSA concurrence to Ministerial Determination for the procurement of 11,813MW new generation capacity. The determination allocated a capacity of 2,000MW to solar PV and 513MW to energy storage[4]. Algeria announced a 4GW five-year solar plan while Zimbabwe announced an invitation to bid for 500MW of solar capacity. President Ramaphosa also announced in June that our post pandemic economic stimulus plan will have infrastructure development at its core.

The United Nations and World Bank’s Sustainable Energy For All programme released its The Recover Better with Sustainable Energy Guide for African Countries in June. At the launch of the guide, Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy, said that Africa has a “once in a generation opportunity to ‘recover better’ with sustainable energy”.  With an estimated 565 million unelectrified people in Africa, and an annual GDP impact of $26.6 billion as a result, it’s clear that if South Africa (and the rest of the continent) harnesses the real value of solar – the potential for growth could be extraordinary.

Author: Tiaan Hendriks

About the author:

Tiaan Hendriks has a Masters in Mechanical Engineering in Renewable and Sustainable Energy from Stellenbosch University. As the National Sales Engineer at SEM Solutions, a company specialising in sustainably engineered energy and water solutions for the commercial and industrial building sectors, he is a qualified commentator for the renewable energy industry.

[1] Eskom media statement. 14 September 2020. Accessed on 14 September 2020.

[2] The Decline and Fall of Eskom: A South African Tragedy Ioannis N. Kessides Report 45, The Global Warming Policy Foundation Accessed on 25 August 2020.

[3] Chen, T., Pourbabak, H. & Su, W., (2019). Electricity market reform, in The Energy Internet, 1sted. Woodhead Publishing.

[4] DMR Media Statement. 10 September 2020. Accessed on 10 September 2020.

This opinion piece was originally published on ESI Africa and is republished with permission with minor editorial changes.

Disclaimer: The articles expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of Green Building Africa or ESI Africa, our staff or our advertisers. The designations employed in this publication and the presentation of material therein do not imply the expression of any opinion whatsoever on the part Green Building Africa concerning the legal status of any country, area or territory or of its authorities.


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