South Africa Eyeing Old Solar, Wind Projects to Reduce Tariffs

The government of South Africa recently held discussions with power producers to procure cheaper electricity from older renewable energy projects.

Although the government has not made any formal proposal to the developers, Energy Minister Gwede Mantashe and Public Enterprises Minister Pravin Gordhan have asked the firms to cooperate as “good citizens,” according to Reuters.

According to the international news agency, the government has asked the companies for “quick win” projects that could support local businesses with cheaper electricity, “offering a sweetener in the form of extensions to power purchase agreements for projects bid between 2011 and 2014”.

Some of the power firms which are backed by big names such as EDF Renewables are of the opinion that they cannot provide the government with big savings to those solar and wind projects that are part of the discussions, “because most of the money has already been spent,” according to Reuters.



Although nearly 82% of South Africa’s electricity is generated from coal, the country of late has become a hotspot for investors in the renewable energy sector. Many solar power projects are under development in the country, which still has millions of households that are yet to be electrified.

In December 2018, Mercom had reported that the African Development Bank (AfDB) approved a loan of ZAR 3 billion (~$220.3 million) to the 100 MW Redstone concentrated solar power project. The project is in the Humansrus Solar Park, in the Northern Cape Province of South Africa and is expected to generate 466 GWh/year. The project is one of the 27 renewable independent power producer projects in South Africa.

According to Mercom Solar Funding and M&A Tracker, to date, 3,032 MW of solar projects across South Africa have secured approximately $6,944 million in project financing.

Image credit: By U.S. Army photo by John Prettyman/released – U.S. Army Corps of Engineers Sacramento District – Second wind turbine brings Tooele Army Depot closer to net zero energy, Public Domain