AfrElec: Eskom outlines ambitious $7.2bn investment in wind and solar

South Africa’s Eskom aims to invest ZAR106bn ($7.2bn) in 5.6 GW of new solar capacity and 8.2 GW of new wind projects over the next decade in a bid to reduce emissions and lessen coal’s dominance of the economy.

In total, South Africa aims to reach 11.5 GW of onshore wind by 2030, together with 8 GW of solar PV and 600 MW capacity of CSP.

The company said this week that it could invest the money by itself or through partnerships with private investors.

The plans come as Eskom CEO André de Ruyter said in August that South Africa could not ignore its carbon footprint, and that Eskom must pivot to green energy.

He said that the South African economy, on a per capita basis, was 25% more carbon intensive than China, and double the global average.

South Africa emits roughly half the total carbon emitted by the African continent, and Eskom emits about 44% of the total South African carbon emissions, he said.

The new investment programme follows the government’s latest integrated resource plan, which outlined Ministry of Energy targets of renewables reaching 26% of total generation by 2030.

At present, 80% of power in South Africa comes from coal-fired plants, many of which are up to 40-50 years old.

Eskom said it would spend ZAR61.75bn ($4.2bn) on wind power and ZAR44.25bn ($3bn) on solar by 2030, according to a report by Bloomberg.

Some of the projects are planned to be set up on the sites of coal-fired plants that are scheduled to close.

Eskom said that its spending plans would be divided into three phases.

In Phase 1 (2022-2023), it aims to build 246 MW of solar PV at the Arnot, Duvha, Lethabo, Majuba and Tutuka coal-fired power plants, as well as 100 MW of solar capacity at Komati and 19.5 MW of solar power at the site of the Sere wind-power plant.

In Phase 2 (2023-2025), projects include 750 MW of concentrated solar power (CSP) at Olyvenhoutsdrift in the Northern Cape, 600 MW of PV power added at Sere, 300 MW of wind power at Kleinzee, 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.

In Phase 3 (2025-2030), 2,950 MW of solar PV capacity and 3,100 MW of wind power would be built at as yet unidentified locations.

The key change here is that until now, most investment in renewables in South Africa has been by private companies.

Eskom now has no plans for further coal plants, and as well as solar and wind it 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, dubbing them “economic suicide” and warning of the loss of thousands of jobs that are currently dependent on coal.