South Africa’s Eskom Plans $7.2 B Investment in Wind & Solar

South African electricity public utility Eskom Holdings SOC Ltd. is planning to invest 106 billion rand, or $7.2 billion, in wind and solar power by the end of the decade. Eskom, which accounts for two-fifths of the nation’s greenhouse gas output, may execute its plan either independently or through a partnership.

A few months ago, South Africa’s Department of Energy published an updated Integrated Resource Plan, which states that overall renewable energy resources are set to grow to 26% of total energy over the next 12 years. At present, 80% of energy in South Africa comes from coal-fired plants, which are said to be 40-50 years old.

The country aims to reach 11.5 GW capacity of onshore wind, 8 GW capacity of solar PV and 600 MW capacity of CSP by 2030, which would involve the addition of 5.6 GW in PV capacity and 8.2 GW of wind.

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State-owned Eskom envisages spending 61.75 billion rand on wind power and 44.25 billion rand on solar energy by the end of the decade, according to a report by Bloomberg. Some of the projects are planned on the sites of coal-fired plants that are scheduled to close. Eskom confirmed the presentation and the costs without giving further detail, says the news provider.

Earlier this month, Eskom Chief Executive Officer Andre de Ruyter revealed a funding plan to help the power supplier transition away from coal, the most harmful fossil fuel, towards capitalising on the nation’s vast renewable energy resources such as wind and solar.. The CEO has said that Eskom is considering 8,017 MW of projects. This reportedly includes not only wind and solar power, but hydropower and gas too.

Addressing the Presidential Climate Commission, de Ruyter has said that the Komati power plant would be the first to be switched, serving “as a pilot project for the conversion of a number of other facilities.” The head of the SOE’s energy transition department has said that the transition could cost $10 billion. Eskom would finance the project through a multi ender loan facility “from development finance institutions that would be paid out in segments over a number of years,” according to media reports.

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Following the necessary approvals, the potential investment plan will take place in three phases:

• Phase 1 (2022-2023): Building possibly 246 MW of solar PV at the Arnot, Duvha, Lethabo, Majuba and Tutuka coal-fired power plants, 100 MW of solar capacity at Komati, and 19.5 MW of solar power at the site of the Sere wind-power plant.
• Phase 2 (2023-2025): Building possibly a 750 MW concentrated solar power plant at Olyvenhoutsdrift in the Northern Cape, 600 MW of PV power added at Sere, 300 MW of wind power at Kleinzee on SA’s northwest coast, 200 MW of wind power at Aberdeen in the Eastern Cape province, and 250 MW of renewable capacity on the sites of decommissioned coal-fired power plants.
• Phase 3 (2025-2030): 2,950 MW of solar PV capacity and 3,100 MW of wind power.

Until now almost all of South Africa’s investment and planned investment in renewable energy has been by private companies. Eskom has no plans for further coal plants but is considering investment in battery storage and gas-fired plants.

Although President Cyril Ramaphosa has set up a commission to advise him on climate change, energy minister Gwede Mantashe has expressed opposition to Eskom’s plans publicly on account of their potentially eliminating thousands of jobs that are currently dependent on coal.