Wind energy construction activity in South Africa will peak at more than 1 GW of capacity in 2020/21 as developers race to operationalise projects that were awarded during the fourth bid window of the Renewable Energy Independent Power Producers Procurement Programme, says Wood Mackenzie (WoodMac) Power & Renewables.

Its ‘Africa wind power market outlook 2019’ report states that, in the longer term, the country’s Integrated Resource Plan is expected to target more than 10 GW of additional wind power capacity through 2030.

Further, President Cyril Ramaphosa’s proposed reforms for the power sector is expected to create a more favourable environment for renewable energy deployment.

South Africa boasts Africa’s largest wind power market with 2.1 GW of operational capacity as of the first quarter of 2019. Issues with governance that took place in 2016 and 2017 were bad news for the local wind market, as no new additions were recorded in 2018, says WoodMac senior analyst Sohaib Malik.

“However, installations are expected to restart in 2019 with 130 MW of new capacity additions, though potential project delays jeopardise that capacity and limit any upside potential for additional capacity.

“Growth prospects improve thereafter, with more than 1 GW of capacity expected in 2020 and 2021 combined. This outlook is supported by ongoing construction activity, peaking in 2020 as IPPs race to achieve commercial operations.”

Meanwhile, cumulative wind power capacity in Africa stood at 5.5 GW by the end of 2018. Africa’s wind project pipeline stands at 18 GW as of the first quarter of this year 2019, says Malik.

“The project realisation rate, however, remains low in the region owing to a host of challenges faced by developers. As some governments took measures to address these issues, the regional market is expected to recover and grow exponentially between 2019 and 2021.

“Competitive procurement has proven to be the favoured tool of policy support, with South Africa and Morocco having introduced auction programmes in 2011 and 2015, respectively. Tunisia solicited bids for wind independent power producers (IPPs) in 2017, while Kenya and Ethiopia are contemplating the launch of auctions for future installations.

The National Renewable Energy Authority (NREA) maintained market leadership in Egypt in 2018. This is expected to change with the commissioning of the 262 MW Gulf of Suez project by an Engie-led consortium this year.

“Similarly, the commissioning of 1 GW of wind capacity in Morocco, awarded between 2012 and 2016, will enhance [the role of] IPPs in this market. It is necessary for Egypt and Morocco to take measures to consolidate their success.

As more governments introduce long-term plans to support wind power and heed investors’ concerns, private sector confidence in emerging markets will continue growing, he points out.

“IPPs in Tunisia were lukewarm owing to concerns regarding the power purchase agreement terms. The government addressed these concerns by revising the contentious terms.

“On the back of making these amendments, the government received substantial interest for the 620 MW of capacity it will award before 2020. Similar favourable developments in countries including EthiopiaTunisiaKenyaAlgeria and Ghana offer a combined 6.2 GW wind market opportunity for developers and original-equipment manufacturers through 2028,” adds Malik.