South Africa Wind Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South Africa wind energy market is segmented by Location (Onshore and Offshore)

Market Snapshot

South Africa Wind Energy-Market Summary
Study Period: 2019-2027
Base Year: 2021
CAGR: >3 %

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Market Overview

The wind energy market in South Africa is expected to grow at a CAGR of more than 3% during the forecast period of 2022-2027. The COVID-19 pandemic in Q1 of 2020 has resulted in a decline in overall energy consumption, disrupted the supply chains, and slowed down onshore and offshore wind construction activities around the country. For Instance: On 25 March, Government has issued a notice was issued which states that, amongst other things, classified electricity production, supply, and maintenance as essential services and, by implication, meant that renewable energy projects under construction were not classified as essential services and would have to cease operation under level 4 lockdown. Thus, The projects under construction had to stop operation when lockdown started as they were not listed as an essential service. Factors, such as increasing population and rising power demand, along with auctioned projects for wind energy during 2022-2027, is expected to drive the market in the forecast period. With auctions for multiple projects and ambitious goals to achieve in the future, South Africa is investing significantly in the growth of wind energy. On the other hand, the high initial cost for wind energy installation, development of new grid networks, and delays in new projects are expected to restrain the market.

  • Onshore segment installations will dominate the market during the forecast period.
  • According to the International Energy Agency (IEA), electricity generation from wind energy in South Africa is expected to reach 81 TWh by 2040, which is anticipated to create ample opportunities for market players in the coming period.
  • Government Initiatives and upcoming projects to drive the market during the forecast period.

Scope of the report

The South Africa wind energy market report includes:

Location
Onshore
Offshore

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Key Market Trends

Onshore Segment is Likely to Dominate the Market

  • Onshore wind energy in South Africa will dominate the market during the forecast period. The country added 515 MW of new onshore wind installation in 2020 compared to 0 MW of new installations in 2019 as per the global wind energy council (GWEC).
  • In November 2021, South Africa has awarded preferred bidder status to 12 onshore wind farms with a combined capacity of just over 1.6GW.
  • Additionally, in August 2021, South Africa's electricity public utility ESKOM has announced plans to invest USD 7.2 billion across the wind and solar projects which in turn will also support the growth of the segment.
  • The South Africa Department of Energy published an integrated resource plan in 2021, which states that overall renewable energy sources will grow by 26% of total energy over the next twelve years. The country aims to reach 11.5 GW capacity of the onshore wind segment under the plan. Thus, the onshore segment will grow during the forecast period
  • Also, with the involvement of international market players and rapid adaptation of renewables, the LCOE for wind has witnessed a significant drop, resulting in the growth of the wind market in the forecast period.
  • With upcoming onshore projects and decreasing wind power costs, considerable growth is anticipated in the future.
Onshore Wind Energy Installations in MW, South Africa, 2016-2020

Government Initiatives and Upcoming Projects to Drive the Market

  • Considering South Africa’s renewable goals, International Energy Agency is estimating the wind electricity generation capacity to reach 12 TWh in 2025 and 81 TWh in 2040, which can bring considerable growth in the power market of South Africa.
  • With its Integrated Resource Plan 2019, South Africa aims to install 16000 MW of wind energy by 2030. If achieved, South Africa can become a major wind energy producer globally.
  • In November 2020, Kangnas Wind Farm, located in the Northern Cape, began commercial operation after completing the fourth round of South Africa’s Renewable Energy Independent Power Producer Program. The facility generates around 513,200 MW/h per year of clean, renewable energy, which can power up to 155,000 South African households and eliminate roughly 550,00 tons of carbon emissions per year.
  • South Africa has also launched bid window 5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in May 2021, which is expected to bring significant foreign direct investment into the country.
  • With active and bold initiatives by the government of South Africa, the wind energy market can be seen driving ahead in the future.
South Africa Wind Energy Market-Forecast of Electricity Generation from Wind Energy

Competitive Landscape

The South Africa wind energy market is partially fragmented. Some of the major companies include Nordex SE, Vestas Wind Systems A/S, Electricite de France SA, Siemens Gamesa Renewable Energy SA, Enel S.p.A and others.

Recent Development

  • On October 2021, the South Africa Department of Mineral Resources and Energy (DMRE) announced it has selected 25 preferred bidders for just under 2.6GW of renewable capacity in the fifth bid window (BW5) under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Under the programme, the bidders will be allocated 1.6GW of onshore wind.
  • In May 2020, the Swedish floating windfarm developer Hexicon has launched a new join venture with a local companyin South Africa to explore the possibility of generating electricity from offshore wind in South Africa

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Renewable Energy Mix, 2020

    3. 4.3 Installed Capacity and Forecast in MW, till 2027

    4. 4.4 Recent Trends and Developments

    5. 4.5 Government Policies and Regulations

    6. 4.6 Market Dynamics

      1. 4.6.1 Drivers

      2. 4.6.2 Restraints

    7. 4.7 Supply Chain Analysis

    8. 4.8 PESTLE Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Location

      1. 5.1.1 Onshore

      2. 5.1.2 Offshore

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Company Profiles

      1. 6.3.1 Vestas Wind Systems A/S

      2. 6.3.2 Enel S.p.A

      3. 6.3.3 Siemens Gamesa Renewable Energy SA

      4. 6.3.4 Electricite de France SA

      5. 6.3.5 Nordex SE

      6. 6.3.6 Mainstream Renewable Power Ltd

      7. 6.3.7 Eskom Holdings SOC Ltd

      8. 6.3.8 Hexicon AB

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The South Africa Wind Energy Market market is studied from 2019 - 2027.

The South Africa Wind Energy Market is growing at a CAGR of >3% over the next 5 years.

Electricite de France SA , Enel S.p.A , Nordex SE, Vestas Wind Systems A/S, Siemens Gamesa Renewable Energy SA are the major companies operating in South Africa Wind Energy Market.

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