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South Africa Power Report – 2020/21

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2 AFRICAN ENERGY • SOUTH AFRICA POWER REPORT • 2020/21

About African Energy Reports

South Africa Power Report – 2020/21

Published April 2020

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Contents

AFRICAN ENERGY • SOUTH AFRICA POWER REPORT • 2020/21 3

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY.......................................................................................13

COUNTRY SNAPSHOT............................................................................................18

2. RISK MANAGEMENT REPORT...........................................................................19

3. POLITICAL OVERVIEW........................................................................................22

3.1 Structure of government ...............................................................................................................22

3.1.1 Political system............................................................................................................................22

3.1.2 Three tiers of government ...........................................................................................................22

3.1.3 Executive authority ......................................................................................................................23

3.1.4 Legislative authority.....................................................................................................................23

Box 1: Cyril Ramaphosa: a multi-faceted career ...............................................................................24

3.1.5 An independent judiciary under heavy stress .............................................................................25

3.2 Stability of political system ...........................................................................................................25

3.2.1 A social contract under pressure.................................................................................................26

3.2.2 Divisions within the African National Congress...........................................................................26

3.2.3 ‘State capture’ and other governance concerns.........................................................................27

3.3 The main political parties ..............................................................................................................27

3.3.1 Governing party: the African National Congress.........................................................................27

Box 2: Profiles of leading ANC actors ................................................................................................28

3.3.1.i Factional divisions .....................................................................................................................29

3.3.2 The official opposition party: Democratic Alliance ......................................................................29

Box 3: Profiles of leading Democratic Alliance figures......................................................................29

3.3.2.i Democratic Alliance splits: Good ..............................................................................................30

3.3.3 Radical opposition: Economic Freedom Fighters .......................................................................30

Box 4: Julius ‘Juju’ Malema and the EFF ...........................................................................................31

3.4 Elections ........................................................................................................................................31

3.4.1 Electoral system ..........................................................................................................................31

3.4.2 Most recent election....................................................................................................................31

3.4.3 Voter disenchantment..................................................................................................................33

3.4.4 Next elections..............................................................................................................................33

3.5 Corruption......................................................................................................................................33

3.5.1 Resistance to change..................................................................................................................34

3.5.2 Foreign courts and ‘state capture ...............................................................................................34

3.5.3 Transparency International rating ................................................................................................34

3.6 Security risk ...................................................................................................................................35

Contents


3.6.1 Personal security and criminality.................................................................................................35

3.6.2 Risks of political violence ............................................................................................................35

3.6.3 Risk of terrorism ..........................................................................................................................36

3.6.4 Risk of ethnic/tribal conflict .........................................................................................................36

3.7 Political economy and major policy initiatives.............................................................................36

3.7.1 Downgrades and gridlock in the political system........................................................................37

3.7.2 Economic policy ..........................................................................................................................38

3.7.3 National Development Plan 2013-30...........................................................................................38

3.7.4 Economic stimulus, recovery plans and social uplift ..................................................................39

3.8 Eskom and the ESI crisis ..............................................................................................................40

3.8.1 The politics of private energy investment....................................................................................41

Box 5: Minister of mineral resources and energy Gwede Mantashe ................................................42

Box 6: The 2019 Integrated Resource Plan........................................................................................43

3.8.2 Climate change............................................................................................................................43

4. MACROECONOMICS ..........................................................................................45

4.1 Overview ........................................................................................................................................45

4.1.1 Reform and missed targets .........................................................................................................46

4.1.2 A very difficult outlook.................................................................................................................47

4.2 Economic structure and stunted growth......................................................................................47

4.2.1 Trends/projections.......................................................................................................................47

4.1.2 Breakdown of economy by sector ..............................................................................................48

4.3 Inflation and the central bank .......................................................................................................48

4.4 Fiscal deficit and debt: rising fast under SOE burden.................................................................49

4.4.1 State-owned enterprises .............................................................................................................50

– Eskom................................................................................................................................................50

– South African Airways .......................................................................................................................50

– Denel..................................................................................................................................................50

4.4.2 The 2020 budget .........................................................................................................................51

4.4.3 Risk of debt distress....................................................................................................................51

– Debt-to-GDP......................................................................................................................................52

– Debt service-to-revenue ....................................................................................................................52

4.4.4 Major creditors and future borrowing..........................................................................................52

4.4.5 Potential IMF deal........................................................................................................................53

4.5 Balance of payments.....................................................................................................................53

4.6 Foreign reserves and the rand ......................................................................................................53

4.7 Credit ratings .................................................................................................................................54

Contents


4.8 Key lending rates...........................................................................................................................55

4.9 WBG Ease of Doing Business.......................................................................................................55

4.10 Major recent developments ........................................................................................................56

MAP: SOUTH AFRICA’S ELECTRICITY INFRASTRUCTURE................................57

5. POWER SECTOR OVERVIEW .............................................................................60

5.1 Overview ........................................................................................................................................60

5.2 Market structure ............................................................................................................................60

5.2.1 Future developments...................................................................................................................61

5.3 Profiles of institutions....................................................................................................................61

5.3.1 Utilities.........................................................................................................................................61

– Eskom Holdings.................................................................................................................................61

5.3.2 Regulators ...................................................................................................................................62

– National Energy Regulator of South Africa ........................................................................................62

5.2.3 Ministries .....................................................................................................................................62

– Department of Mineral Resources and Energy..................................................................................62

– Department of Public Enterprises......................................................................................................62

– National Treasury ...............................................................................................................................62

– IPP Office...........................................................................................................................................63

5.4 Market operation ...........................................................................................................................63

5.5 Sector history ................................................................................................................................63

5.5.1 Ownership and organisation history............................................................................................63

5.5.2 Role of independent power producers........................................................................................66

5.6 Regional electricity trade ..............................................................................................................66

5.7 Financial challenges......................................................................................................................67

5.8 Main consumers of electricity.......................................................................................................68

6. POWER SECTOR POLICY AND REGULATION..................................................69

6.1 Overview ........................................................................................................................................69

6.2 Major legislation ............................................................................................................................69

– National Energy Act, 2008 .................................................................................................................69

– National Energy Regulator Act, 2004 ................................................................................................70

– Electricity Regulation Act, 2006.........................................................................................................70

– Nuclear Energy Act, 1999 ..................................................................................................................70

– Grid Code ..........................................................................................................................................70

– National Environmental Management Act, 1998 ...............................................................................70

– Public Finance Management Act, 1999.............................................................................................70

Contents


– Draft Public Procurement Act, 2020..................................................................................................70

– Carbon Tax, 2019 ..............................................................................................................................70

– Independent Market Operator Bill, 2019 ...........................................................................................71

6.3 Sector plans and policies..............................................................................................................71

– White Paper on Energy Policy, 1998 .................................................................................................71

– Renewable Energy Policy White Paper, 2003....................................................................................71

– Integrated Energy Plan, 2016 ............................................................................................................71

– Integrated Resouce Plan, 2019 .........................................................................................................72

– Gas Utilisation Master Plan ...............................................................................................................74

– Eskom Transmission Plan, 2020-2029 ..............................................................................................74

– Roadmap for Eskom in a Reformed Electricity Supply Industry .......................................................74

Box 7: Key aspects of the Eskom Roadmap......................................................................................77

6.4 Legal requirements........................................................................................................................78

6.4.1 Generation...................................................................................................................................78

6.4.2 Transmission................................................................................................................................79

6.4.3 Distribution ..................................................................................................................................79

6.4.5 Economic empowerment ............................................................................................................79

6.5 Procurement ..................................................................................................................................80

6.5.1 Competitive bidding ....................................................................................................................80

– Renewable Energy Independent Power Producer Procurement (REIPPP) programme....................80

– Small Projects Independent Power Producer Procurement (SPIPPP) programme...........................82

– Coal Baseload IPP procurement programme....................................................................................82

– Battery energy storage systems........................................................................................................83

– LNG-to-power IPP procurement programme....................................................................................83

– Risk Mitigation Power Purchase Programme....................................................................................84

6.5.2 Municipality procurement ............................................................................................................85

6.6 Tariffs..............................................................................................................................................85

6.6.1 Regulatory clearing account........................................................................................................85

6.6.2 Wholesale ....................................................................................................................................86

6.6.3 Retail............................................................................................................................................86

6.6.4 Differences between Nersa and Eskom tariffs ............................................................................86

6.7 Currency risk..................................................................................................................................86

6.8 Major adverse incidents affecting IPPs........................................................................................86

– Eskom refusing to approve REIPPP projects ....................................................................................86

– Budget quote and transmission delays for REIPPPs ........................................................................87

– Sacking of Karén Breytenbach..........................................................................................................87

Contents


6.9 Guarantees and mounting government liabilities ........................................................................88

Box 8: Eskom – a failing giant.............................................................................................................89

7. FROM THE NEWSLETTER ..................................................................................90

8. RESOURCE AVAILABILITY .................................................................................91

8.1 Overview ........................................................................................................................................91

8.2 Hydrocarbons market....................................................................................................................91

8.2.1 Overview......................................................................................................................................91

8.2.2 Key agencies ...............................................................................................................................91

– PetroSA..............................................................................................................................................91

– Petroleum Agency of South Africa ....................................................................................................91

– iGas....................................................................................................................................................92

– Transnet .............................................................................................................................................92

8.2.3 Legislation ...................................................................................................................................92

– The draft Upstream Petroleum Resources Development Bill ............................................................92

8.2.4 Licensing .....................................................................................................................................93

8.3 Coal ................................................................................................................................................93

8.4 Crude oil.........................................................................................................................................94

8.5 Natural gas.....................................................................................................................................94

8.6 Liquified natural gas......................................................................................................................94

8.7 Geothermal ....................................................................................................................................95

8.8 Solar ...............................................................................................................................................95

8.9 Wind ...............................................................................................................................................95

8.10 Hydroelectricity ...........................................................................................................................96

8.11 Shale gas .....................................................................................................................................96

8.12 Regional gas ................................................................................................................................96

8.12.1 SADC master plan.....................................................................................................................97

8.12.2 Mozambique: from ‘modest producer’ to global player ............................................................97

– Export LNG projects ..........................................................................................................................97

– Potential pipeline projects .................................................................................................................98

8.12.3 Sasol’s Mozambique play and gas transition strategy..............................................................98

8.12.4 Potentials for indigenous gas production coupled with LNG imports ......................................99

– Other sources of gas .......................................................................................................................100

MAP: SOUTH AFRICA’S OIL AND GAS INFRASTRUCTURE..............................101

9. COMPETITIVE LANDSCAPE.............................................................................102

9.1 Overview ......................................................................................................................................102

Contents


9.2 Landmark power projects ...........................................................................................................102

– Largest power plant: Medupi Coal ..................................................................................................102

– Kusile Coal.......................................................................................................................................103

– Largest nuclear: Koeberg Nuclear ...................................................................................................103

– First IPP: Rand Central Electric Works Coal....................................................................................104

– Largest operating IPP: Avon Diesel .................................................................................................105

– First REIPPP: Kalkbuit Solar ............................................................................................................105

– Largest state-owned project: Kendal Coal ......................................................................................105

9.3 First renewable IPP procurement round: REIPPP round 1........................................................106

9.4 Under construction generation projects ....................................................................................106

– Aggeneys Solar PV ..........................................................................................................................106

– Bokamoso Solar PV.........................................................................................................................107

– Copperton Wind ..............................................................................................................................107

– Droogfontein Solar PV II ..................................................................................................................108

– Dyason’s Klip Solar PV I ..................................................................................................................108

– Dyason’s Klip Solar PV II .................................................................................................................108

– Garob Wind......................................................................................................................................109

– Greefspan Solar PV II ......................................................................................................................109

– Kangnas Wind .................................................................................................................................110

– Karusa Wind ....................................................................................................................................110

– Konkoonsies Solar PV II ..................................................................................................................111

– Ngodwana Mill Lignin Expansion ....................................................................................................111

– Nxuba Wind .....................................................................................................................................112

– Oyster Bay Wind..............................................................................................................................112

– Perdekraal East Wind ......................................................................................................................113

– Roggeveld Wind ..............................................................................................................................113

– Sirius Project One Solar PV .............................................................................................................114

– Soetwater Wind ...............................................................................................................................114

– Waterloo Solar PV............................................................................................................................115

9.5 Selected key developers.............................................................................................................115

– Actis.................................................................................................................................................115

– Biotherm Energy ..............................................................................................................................115

– Acwa Power.....................................................................................................................................115

– Juwi Renewable Energies................................................................................................................116

– Mulilo Renewable Energy ................................................................................................................116

– Sasol ................................................................................................................................................116

Contents


– SolarReserve South Africa...............................................................................................................116

9.6 Selected key financiers ...............................................................................................................116

– Absa Bank Ltd .................................................................................................................................116

– Nedbank and Nedbank New Energy Finance..................................................................................116

– Phakwe Group .................................................................................................................................116

– Old Mutual Investment Group South Africa Ltd ..............................................................................116

10. TRANSMISSION AND DISTRIBUTION ...........................................................117

10.1 Overview ....................................................................................................................................117

10.2 T&D losses .................................................................................................................................118

10.3 Critical issues facing the network.............................................................................................118

10.4 Sector reforms ...........................................................................................................................118

10.5 Planned grid improvements......................................................................................................118

10.5.1 Strategic Grid Plan 2040 .........................................................................................................118

10.5.2 Transmission Development Plan (2020-2029) .........................................................................119

10.6 Regional trade ...........................................................................................................................120

10.6.1 Southern African Power Pool ..................................................................................................120

– Bilateral contracts............................................................................................................................121

– Competitive market .........................................................................................................................121

10.6.2 Existing interconnections ........................................................................................................123

10.6.3 Planned interconnections........................................................................................................123

– Botswana-South Africa (BoSa) ........................................................................................................123

– Mozambique-Zimbabwe–South Africa (MoZiSa).............................................................................123

10.7 Electricity imports/exports........................................................................................................124

10.7.1 Imports ....................................................................................................................................124

10.7.2 Exports ....................................................................................................................................124

11. OFF-GRID .........................................................................................................125

11.1 Overview ....................................................................................................................................125

11.2 Off-grid legislation and strategies ............................................................................................125

10.2.1 Integrated National Electrification Programme .......................................................................125

10.2.2 New Household Electrification Strategy..................................................................................126

11.3 Electrification and access rates................................................................................................126

– National............................................................................................................................................126

– Urban ...............................................................................................................................................126

– Rural ................................................................................................................................................126

11.4 Initiatives and programmes.......................................................................................................126

11.4.1 Off-grid Solar Home System Programme South Africa...........................................................126

Contents

11.5 Off-grid regulation .....................................................................................................................127

11.5.1 Electricity Regulation Act of 2006 ...........................................................................................127

11.5.2 Solar Home Systems...............................................................................................................127

11.6 Selected off-grid players...........................................................................................................127

11.6 Embedded generation...............................................................................................................128

11.6.1 Mines .......................................................................................................................................128

12. DEMAND AND SUPPLY OUTLOOK................................................................129

12.1 Overview ....................................................................................................................................129

12.2 Demand......................................................................................................................................130

12.2.1 Projections...............................................................................................................................130

12.2.2 Factors influencing growth ......................................................................................................130

12.3 Generation .................................................................................................................................130

12.3.1 Government projections..........................................................................................................131

– Medium-term system adequacy (2019-2024) .................................................................................131

– Integrated Resource Plan 2019 (2019-2030)...................................................................................132

12.3.2 African Energy pipeline 2020-2024 .........................................................................................133

12.4 Demand and supply outlook, 2020-2030 .................................................................................134

12.5 The cost of cleaner coal............................................................................................................135

13. DATA TABLES...................................................................................................137

– Methodology....................................................................................................................................137

– Installed capacity, RE vs non-RE, 2010-2024 (MW & %) ................................................................137

– Installed capacity by fuel type, 2010-2024 (MW) ............................................................................138

– Installed capacity by fuel type, 2010-2024 (%) ...............................................................................138

– Installed capacity, liquid fuels breakdown, 2010-2024 (MW) ..........................................................139

– Installed capacity, liquid fuels breakdown, 2010-2024 (%) .............................................................139

– Installed capacity by technology type, 2010-2024 (MW) ................................................................140

– Installed capacity by technology type, 2010-2024 (%) ...................................................................141

– Installed capacity by ownership type, 2010-2024 (MW) .................................................................142

– Installed capacity by ownership type, 2010-2024 (%) ....................................................................142

– Installed capacity by provinces, 2010-2024 (MW)...........................................................................143

– Installed capacity by provinces, 2010-2024 (%) .............................................................................144

– Installed capacity by fuel, Eastern Cape, 2010-2024 (MW) ............................................................145

– Installed capacity by fuel, Free State, 2010-2024 (MW)..................................................................145

– Installed capacity by fuel, Gauteng, 2010-2024 (MW).....................................................................145

– Installed capacity by fuel, KwaZulu Natal, 2010-2024 (MW)...........................................................145

– Installed capacity by fuel, Limpopo, 2010-2024 (MW) ....................................................................145


Contents

– Installed capacity by fuel, Mpumalanga, 2010-2024 (MW) .............................................................145

– Installed capacity by fuel, North West, 2010-2024 (MW) ................................................................145

– Installed capacity by fuel, Northern Cape, 2010-2024 (MW)...........................................................146

– Installed capacity by fuel, Western Cape, 2010-2024 (MW)............................................................146

Project listings ...................................................................................................................................147

– Operating.........................................................................................................................................147

– Under construction..........................................................................................................................150

– In development ................................................................................................................................151


Section


1. Executive summary

In some contexts, the South African electricity supply industry (ESI) has been viewed as an attractive

destination for investment due to its stable government, economy and policy direction. This was

especially the case as the government rolled out its ground-breaking Renewable Energy Independent

Power Producer Procurement (REIPPP) programme in 2011.

However, for all South Africa’s strengths – which include a robust judiciary and banking sector – a

number of underlying tensions and challenges mean that long-term investments are far from being risk-

free. The South Africa Power Report 2020/21 outlines the market’s attractions and downsides for power

developers, financiers and other industry stakeholders.

A changing of the political guard

The South African political landscape appears, in many ways, a picture of stability. The ruling African

National Congress (ANC) has been victorious in every election of the post-apartheid era, which began

with the abolition of white rule in 1994. This masks a more unpredictable reality, however. While the

ANC won 57.7% of the popular vote in the 2019 election, it is torn by rampant factionalism. Meanwhile,

the recent rise of opposition parties – such as the Economic Freedom Fighters (EFF), led by political

firebrand Julius Malema, and the rebranded Democratic Alliance – points to a shifting political

landscape, providing plenty of political intrigue and fuelling crony relationships that have had a

significantly negative impact on business.

Within the ANC, battle lines have been drawn across ideological and pragmatic lines. Those loyal to

ex-president Jacob Zuma, who resigned in disgrace in 2018, rally around a cry for “radical economic

transformation”. New leader President Cyril Ramaphosa promises to deliver foreign investment, revive

the economy and restore the South African government’s domestic and international reputation by

rooting out corruption.

The impact and consequences of apartheid-era politics are deeply felt to this day, as high levels of

inequality and unemployment remain embedded in society. Broader anti-government frustrations have

brewed since the ANC to power in 1994, caused by sometimes alarmingly poor levels of governance,

widespread corruption and statist politics. While the legacy of apartheid looms over these issues, history

will likely judge that many of these abuses were eminently avoidable.

The jury is out on whether he will succeed, but Ramaphosa seems almost uniquely placed to begin

repairing the social contract. The president, a close ally of national icon Nelson Mandela, was the first

general secretary of the influential National Union of Mineworkers (NUM). Ramaphosa remade himself

as a leading entrepreneur – and has thus been promoted as a financially sensible and trustworthy

candidate, in stark contrast to Zuma – and enjoys broad support among the general populace.

Ramaphosa scored an approval rating of 62% in a February 2020 poll, which outstrips the approval of

the party he represents by around seven percentage points. However, balancing much-needed reform

with the support of key policy-makers is a political tightrope, and there is a palpable impatience resulting

from the government’s sluggishness in addressing key issues.

Section


Executive summary

Tackling corruption and state capture

Since Ramaphosa assumed office, there have been some tangible improvements in pushing back the

frontiers of kleptocracy that were normalised under Zuma. Under the previous administration over

R500bn ($34bn) is alleged to have been stolen from state companies and government departments.

Milestones include the arrest in November 2019 of Zuma ally, former minister Bongani Bongo. Zuma

and his cronies have been put on trial in a system where the courts proved sufficiently robust to

withstand ‘state capture’ even if some judges and police bodies were caught (and literally bought) in

the Zuma web.

While this represents progress, critics argue that the pace of reform – reviving both the public’s and

international partners’ confidence in the South Africa state – has been far too slow. Zuma’s protracted

trial, a steady drip of revelations and crises in institutions crippled by poor governance, led by state

utility Eskom, mean the crisis of governance has not strayed far from the forefront of public

consciousness.

Overly cautious economic policies have proven too little, too late

The long-held hope of a post-apartheid transformation, which would blend social equity with economic

opportunity (and accelerated growth), has been undermined by a decade of disappointing growth. As

South Africa Power Report 2020/21 went to press, South Africa was alarmingly close to losing its last

remaining investment-grade credit rating (assigned by Moody’s Investors Service, which was widely

seen by markets as being too understanding towards the South African sovereign, unlike Standard &

Poor’s and other agencies).

Promises of reform by the incoming president have been welcomed by international investors but have

often seemed too sluggish or half-hearted in delivery to overcome the legacy issues that went

unchecked by previous administrations. South Africa remains confronted by unsustainably high

unemployment, a moribund economy (which in late 2019/early 2020 was reflected in successive

quarters of negative growth) and flailing state-owned enterprises (SOEs).

SOEs continue to siphon money from public coffers, rather than contributing positively to the national

economy. These shortfalls are exemplified by Eskom, which has become symbolic of national economic

malaise, as the state power utility struggles with over-employment, dependency on coal for power

generation and responsibility for the ever unpopular need for load-shedding. Prescriptions for reversing

Eskom’s decline go to the heart of many of country’s most pressing debates.

While South Africa has a vibrant financial services sector, and its market is sufficiently large and open

to attract entrepreneurs and innovators, opportunities for private investors may be constrained by the

continued dominance of the state and ‘statist’ perceptions; these perceptions continue to play a major

role in ANC, EFF and other policy prescriptions offered to a majority of voters who have hardly benefitted

from the fruits of a globalised, liberal economy. It could be argued these benefits would have been much

greater if South Africa had been truly liberalised and liberated. But that is a matter of great debate within

the ‘rainbow nation’, with consequences for those investing in the country potentially for decades to

come.

A power sector in crisis

The electricity supply industry’s struggles are well documented, and the government’s broken promise

to prevent load shedding has developed into a serious political and economic issue. The sector’s


Executive summary

institutions have been seriously undermined, as highlighted by the resignation of Eskom chair Jabu

Mabuza in January 2020. Reliable power supply is critical to economic activity; its absence is particularly

ruinous to the mining sector, a key source of income and jobs. The problems are well-known and their

resolution is urgent, but such is the depth of South Africa’s crisis that deeply unpopular and value-

destructive load-shedding looks certain to be an unfortunate reality for the foreseeable future, as the

government itself admitted in early 2020.

Despite once being heralded as a world-leading model for state-led power management, years of

financial mismanagement have resulted in chronic failures of state utility Eskom, which now requires

significant structural reform. The government published the Roadmap for Eskom in a Reformed

Electricity Supply Industry in late-2019; this outlined plans to legally separate generation, transmission

and distribution (in structures reminiscent of the forward looking, but not properly implemented Energy

White Paper of 1998). Despite promising ‘bold actions’ to put Eskom on a track to financial sustainability,

many of the more difficult decisions were shirked on distribution, private participation and labour issues

in particular.

A decade of renewables, but coal remains the dominant fuel

Despite the power sector’s struggles in recent years, the Renewable Energy Independent Power

Producer Procurement (REIPPP) programme has had a profound impact on the energy mix and investor

landscape. Remarkably, between 2011 and end-2020, both renewable energy and IPP capacity as

percentages of the energy mix will have increased by more than threefold. The programme has been

implemented via four rounds of bidding, plus an additional concentrated solar power round. A fifth

REIPPP round is planned.

The on-grid energy mix remains dominated by coal, which accounts for 73% of total capacity and has

been prioritised in energy planning. Coal remains of real political significance as a source of employment

– suggesting that projects driven by ‘clean coal’ will remain an important element in the energy mix

despite efforts for South Africa to accelerate its carbon transition.

In 2019, following a highly protracted and politicised process, which exposed competing interests from

within the coal and nuclear lobby, a new Integrated Resource Plan (IRP) was published; this key

document for energy sector planning had not been updated since 2010. The latest version included

priority procurement of 2GW-3GW to help minimise load-shedding and expenditure on diesel, including

a substantially increased capacity for renewable energies but also, controversially, maintaining a

commitment to coal.

Bold reform plans face many challenges

However, the successful implementation of the new IRP is already being called into question. While

African Energy Live Data’s pipeline of in-development generation projects suggest that installed capacity

will reach the IRP’s medium-term target of 63,914MW in 2024, longer-term aspirations will hinge on the

ability to reform the debt-laden and loss-making Eskom. The ‘junking’ of South Africa’s credit rating is

expected to result in slower economic and electricity demand growth. The consequences may be a

reduction in Eskom’s ability to both cover its operating costs and to administer the necessary reforms

that will make the sector competitive; this is likely to make meeting the IRP’s long-term supply targets

more challenging. Beyond new capacity additions, improving availability levels at existing power plants

will be crucial in ending rolling blackouts. Even with lower demand growth, the current availability levels

of 60% will result in the supply deficit growing from -4.4% in 2019 to -6.3% in 2024.


Country snapshot

Republic of South Africa

CapitalPretoria (executive), Bloemfontein(judicial), Cape Town (legislative)

Population 58.78m (est. 2019)

Area 1,221,037km2

Official languages

English, Afrikaans, Zulu, Xhosa,Northern Sotho, Tswana, Southern Sotho, Tsonga, Swazi, Venda, Southern Ndebele

Head of government President Cyril Ramaphosa

Economy

Currency

South African rand (subunit: 1/100 cents)$1=R16.6 as of 17 March 2020

GDP (nominal) $368.135bn (2018)

GDP growth rate 0.78% (2018)

Inflation (y-o-y) 4.9% (2018)

Power sector

Installed generation capacity 56,392MW (December 2019)

Installed IPP capacity 5,492MW (December 2019)

Peak load 34,256MW (2018/19)

Section


2. Risk Management Report

Overview

• For all of the problems that emerged during

Jacob Zuma’s failed presidency, which at times

seemed to have submerge the economy and

political system, African Energy has maintained

Republic of South Africa ’s political risk rating of

‘B’. This classifies South Africa as still having

among the most investment-positive rankings for

any sub-Saharan African (SSA) nation.

• Arguments can be made that this rating is over-

optimistic, but African Energy’s judgement is

underpinned by South Africa’s strong scores in

the fields of ‘democratic accountability’ and

‘stability and violence’, when judged over more

than two and a half decades of democratic rule.

• Following the Zuma years and the apparent

limits on President Cyril Ramaphosa’s ability to

reverse negative trends after two years in office,

South Africa scores lower in ‘governance’ and

‘investment risk’. However, even these indices

may still be considered relatively positive when

compared to its SSA peers.

• The strength of the judiciary and other South

African institutions ensure that continuity and

contract sanctity are still generally well respected,

despite the presence of worrying negative trends

over the past decade, as Zuma and his cronies

sought to degrade the separation of powers.

• While recent efforts to improve governance

have been noted, many of the issues confronting

the South African polity, its business environment

and society are systemic. In tackling this huge

range of issues, Ramaphosa is limited by factional

politics within the ruling ANC and the party’s

historic governing ‘tripartite coalition’ with the

South African Communist Party (SACP) and the

Congress of South African Trade Unions (Cosatu).

Methodology

African Energy’s political risk rating is based on ananalysis of four categories relating to risk: 1. Democraticaccountability; 2. Stability and violence; 3. Governance;and 4. Investment risk.

For each category, a country is awarded a grade of A-F,with A being lowest risk (most positive) and F thehighest risk (the most negative). Any trends are displayedin an upwards (h) or downwards (i) arrow.

Each of the four categories are weighted equally, with acountry being given an overall grade of A-F and a scoreof 1-100 (with 1 being lowest risk and 100 the highestrisk). These ratings are based on global standards.

The four categories are scored based on the followingcriteria:

1. Democratic accountability

a. Threat of military intervention in government

b. Press and other freedom of expression

c. Electoral fairness at national and local level

2. Stability and violence

a. Threats to government stability through civil unrest or political violence

b. Presence of internal conflicts

c. Threat of terrorism

3. Governance

a. Corruption

b. Independence of the judiciary

c. Government effectiveness

4. Investment risk

a. Expropriation/breach of contract risk

b. Transfer and convertibility risk

c. Commercial risk

Political risk rating

Risk gradeB

31/100Democratic accountability A

Stability and violence B

Governance C

Investment risk C

Section


3. Political overview

3.1 Structure of government

3.1.1 Political system: A complex constitutional democratic republic

The Republic of South Africa (RSA) is a constitutional democracy, which from the end of apartheid in

1994 was structured with what was supposed to be a clear separation of executive, legislative and

judicial powers. While the Parliament of the Republic of South Africa has a sometimes vibrant opposition

– led by the official opposition Democratic Alliance (DA) and the populist firebrand Julius Malema’s

Economic Freedom Fighters (EFF) – the African National Congress (ANC) controls the executive and

has a majority in the legislature. A critical long-term question for South Africa is whether its political

system can evolve beyond quasi-automatic ANC domination at a national level (and, indeed, whether

the ANC itself can evolve).

During the last decade the polity’s tripartite structures have come under especially heavy pressure, after

the system reached near breaking point under President Jacob Gedleyihlekisa Zuma, who was elected

in 2009 and finally resigned on 14 February 2018 following a long standoff over governance abuses

involving his inner circle. It is notable that the system survived what came to be called ‘state capture’.

This says much for the influences of a robust judiciary, and also of the media and other civil society

elements. However, these pressures have left the political system in recovery mode. Zuma’s successor,

Matamela Cyril Ramaphosa (head of state since 2018 and before that an uneasy deputy president from

2014), has marked a welcome change from the worst ‘state capture’ years. This is very good news

when it comes to preserving the legitimacy of the political system, but the ruling ANC remains riven by

factional divisions which have undermined Cyril Ramaphosa’s authority.

• The current constitution is South Africa’s fifth. It came into effect on 4 February 1997 during the term

of the late president (1994-1999) Nelson Rolihlahla Mandela (‘Madiba’ – 18 July 1918-5 December 2013),

the nation’s first leader to be elected via representative democracy. It replaced an interim constitution,

which was introduced as the apartheid system was phased out in 1993.

3.1.2 Three tiers of government: national, provincial and local structure

RSA’s is a very complex political structure in which the government operates through three tiers:

national, provincial and local. This accentuates geographical differences. For example, Zuma and his

faction remain a force to be reckoned with in the ex-president’s native KwaZulu-Natal (KZN), while

despite rebranding itself, the opposition DA remains identified with its white liberal core based in Cape

Town. In both cases their support is greater than one heartland: Zuma’s persistently resilient power

base rests on ANC grandees in several provinces while the DA is undoubtedly a national party – as is

Julius Malema’s Economic Freedom Fighters.

Officially, the central government’s Department of Co-operative Governance and Traditional Affairs

(COGTA) is “responsible for supporting provinces and local government in fulfilling their constitutional

and legal obligations”. In practise, provincial and local government can have a high degree of autonomy

– often depending on the degree of political control from the centre.

Section


Politics

Neither at provincial nor local levels is there consistency in structures and policy creation or

implementation. The eight urban metropolitan municipalities, 44 first tier district municipalities and 226

second-tier local municipalities may not be co-ordinated, even within the same province. This has had

a marked impact on the electricity supply industry (ESI), where there may be very different structures

dealing with, say, power distribution within the same region. This reality has undermined several past

attempts by national government at ESI reform.

• Chapter 12 of the 1997 Constitution recognises the status and authority of traditional leaders and

customary law; it allows for the creation of provincial houses and a national council of traditional leaders.

Depending on the situation and personal politics, these leaders may exert real influence. Even such

apparently ‘technocratic’ leaders as Thabo Mbeki (president from June 1999 to September 2008) have

been known to consult sangomas (traditional healers) and other pre-colonial influencers.

3.1.3 Executive authority

The executive branch is made up of the president (currently Cyril Ramaphosa), deputy president (David

Dabede Mabuza) and ministers. As this report was compiled, there were 28 ministers in total – of whom

24 were sourced from the ANC – and 33 deputy ministers. The official list of ‘government leaders’ also

includes nine provincial premiers.

3.1.4 Legislative authority

Legislative authority rests within the Parliament of

the Republic of South Africa, a bicameral

legislature comprising a 400-seat National

Assembly (lower house) and the National Council

of Provinces (NCOP), an upper house which seats

90 representatives consisting of ten for each of the

nine provinces and another ten ‘national’ seats.

• National Assembly members are elected under

a complex system, from national party lists and

provincial party lists via a closed list system of

proportional representation. Seats are first

allocated according to a Droop quota (as used in

most single transferable vote systems) and then

up to five seats are allocated using the largest

remainder method and then any additional seats

are allocated via the highest average method among those parties who by then already have seats. Half

of the 400 National Assembly members are assigned from national lists and the rest from regional lists.

• Overseeing the electoral process is the Independent Electoral Commission (IEC). One of its roles is

to allocate the 200 regional list seats to each province by population.

• Each of the nine provincial governments consist of 30-80 members who are elected via proportional

representation. They have jurisdiction over a range of issues, including planning, trade and health

services.

• Women are well represented in parliament, holding around 46% of seats in the National Assembly.

The constitution is also protective of LGBT rights.

African NationalCongress (ANC)

230

Democratic Alliance(DA) 84

Economic FreedomFighters (EFF) 44

Inkatha Freedom Party(IFP) 14

Freedom Front Plus (FF+) 10

African Christian Democratic Party(ACDP) 4

United Democratic Movement (UDM) 2African Transformation Movement (ATM) 2

Good 2National Freedom Party (NFP) 2

African Independent Congress (AIC) 2Congress of the People (COPE) 2Pan Africanist Congress (PAC) 1

Al Jama-ah 1

National Assemblyof South AfricaNumber of seats

Source: South African parliament website© African Energy 2020(www.africa-energy.com)


Section

4. Macroeconomics

4.1 Overview

An under-performing economy replete with

contradictions

The South African economy is highly developed;

it possesses advanced economic infrastructure

and has been, in some sectors, the trailblazer for

development in sub-Saharan Africa (SSA). Around

75% of the largest African companies are based

in RSA. However, the distribution of wealth is

extremely unequal – a legacy of apartheid and

subsequent governments’ inability to level up

inequalities. Critical to RSA’s failure to achieve

accelerated ‘trickle-down’ has been the

underwhelming economic growth recorded since

the end of apartheid in 1994 and especially in the

last decade. This reality has largely disappointed

predictions that new prosperity would come with

majority rule to inspire Southern Africa’s

economic transformation.

These problems are equally pressing today as

they were when Nelson Mandela entered

government. The International Monetary Fund

(IMF) in its latest Article IV report, published on 30

January 2020, observed that “South Africa

remains an extremely unequal society, with high

and rising unemployment (29%), particularly

among the youth”. Failures to tackle deep

economic and social cleavages have had a

sapping effect of massive inequality and high

levels of joblessness; structures inherited from

apartheid-era politics have been resistant to

radical change, despite the changing racial

balance of management and decision-making.

Persistently poor levels of growth, discussed

below, have caught RSA in a vicious cycle of

economic under-performance and raised social

pressures. The official unemployment level rose

to 29.1% in Q3 2019, which was the highest rate

in decades, with further rises projected even

Table 2: Macroeconomic indicators

GDP growth 0.79% (2018)

Inflation (y-on-y) 4.9% (2018)

Current account balance

Current account (% of GDP) -3.5% (2019)

Current account ($bn) -$13bn (2019)

Balance of payments

(% of GDP)-3% (2019)

Debt

Risk of debt distressStable, but

vulnerable

Debt-to-GDP 53% (2017/18)

Debt service as % of

revenue15% est. (2019/20)

Other indicators

Credit rating

Non-investment

grade speculative

(junk)

Exchange rate$1=R16.6

(Mar 2020)

Interest rate 6.25% (Jan 2020)

Foreign reserves $55.1bn (2019)

WBG Doing Business rating 84/190 (2020)

Section


5. Power sector overview

5.1 Overview

• At present, South Africa’s electricity supply

industry (ESI) is vertically integrated with utility

Eskom having a role in generation, transmission

and distribution. While the utility is solely

responsible for transmission, distribution is

conducted by Eskom as well as municipal

governments. Electricity generation is provided by

Eskom and independent power producers (IPPs).

• The ESI has suffered from extensive load

shedding, growing costs, chronic financial

mismanagement and operational ineffectiveness

that has led to huge debt in the sector.

• Eskom finds itself trapped in a financial vicious

circle as it seeks to service its debt through higher

electricity tariffs. This threatens to drive down

demand, and Eskom’s income with it, leading to

greater losses and higher debts.

• A major reform programme is in place to

unbundle Eskom into separate generation,

transmission and distribution subsidiary entities.

It is expected that the process will not be

completed until at least the end of 2022.

• South Africa’s national electrification rate has

steadily increased from 80.7% in 2006 to 84.4%

in 2016. However, rural electrification rates have

dropped from 69.4% in 2006 to 66.8% in 2016,

according to the World Bank. Off-grid solar

electrification has yet to take off in the country.

5.2 Market Structure

• The ESI is vertically integrated with Eskom

having a role in generation, transmission and

distribution. Eskom is responsible for transmission

and is the single buyer except in the case of small

trader PowerX. The utility is also the system

operator. IPPs can bid in procurement rounds run

by the country’s IPP Office following a ministerial

Department of Minerals and Energy

Department ofPublic Enterprises National Energy

Regulator ofSouth Africa

TransmissionEskom

transmissionPowerX

Distribution/offtakerEskom

distributionMunicipal

governments

ConsumersResidential and

commercialLarge

power usersExports

IPP office

ImportsIPPsGeneration

Eskomgeneration

Power sector structure

Key sector statistics

Installed capacity: 56,392MW (December

2019)

of which IPPs: 5,492MW (December 2019)

Peak load: 34,256MW (2018/19)

Supply: 234,407GWh (est. 2019/20)

No. of customers: 6.5m (Eskom – March

2019)

Network losses: 9.7% (2019)

Market structure: Public-private structure

with vertically integrated utility

Average cost of production: $0.06-

$0.066/kWh (Eskom baseload coal) and

$0.035/kWh (solar PV and wind) (2016)

Average consumer tariff: 10.6¢/kWh (2019)

Section


6. Power sector policy & regulation

6.1 Overview

South Africa has a clear regulatory framework and relatively strong economy that makes the power

sector an attractive prospect for international power developers. However, entrenched domestic politics

has failed to deliver the reform necessary for the sector to be financially sustainable and has contributed

to the mismanagement of Eskom and the wider sector. Policy indecision coupled with Eskom’s financial

situation, governance challenges, and frequent hostility to IPPs have caused significant frustration and

delay for investors.

Key aspects of South Africa’s policy and regulatory approach are:

• The National Development Plan (NDP) 2030 forms the basis for South Africa’s long-term vision. For

the power sector, the focus is a ‘just transition’ to a low carbon economy, whilst ensuring jobs and

livelihoods are retained.

• From the NDP, the Integrated Resource Plan 2019 was published to set out the investment plan for

generation. It sets out the generation mix up to 2030 with a priority procurement of 2,000-3,000MW.

• Renewable energy procurement is set to continue with regular additions up to 2030, comprising

14.4GW of wind and 5GW of solar.

• In 2019, the Roadmap for Eskom in a Reformed Electricity Supply Industry was published and

proposed an unbundling of Eskom and wider reform of the power sector to improve competitiveness,

financial management and accountability.

• Black economic empowerment is a key component of private power procurement and receives

strong political backing.

6.2 Major Legislation

National Energy Act, 2008

Devised by the Department of Energy and enacted in 2008, the National Energy Act sets out the

provisions which govern electricity generation. The act outlines the roles of private participation and

renewable energy in the sector, as well as rules surrounding energy efficiency. It prioritises the

environmental impact of such actions and aims to promote sustainable development within the

economy.

Gener

ation

National Environmental Management Act 1998Public Finance Management Act 1999Nuclear Energy Act 1999Grid CodeNational Energy Regulator Act 2004Electricity Regulation Act 2006National Energy Act 2008Carbon Tax 2019Draft Energy Procurement Act 2020

IPPs

Off-gr

id

Renew

able

ene

rgy

Energ

y

effic

iency

Nuclea

r

Tarif

fs

Regula

tion

Trans

miss

ion

Distrib

ution

Enviro

nmen

t

Procu

rem

ent

Legislation

Section


8. Resource availability

8.1 Overview

South Africa is well positioned to harness energy from a variety of natural resources. It is a continent-

leader in the production and consumption of coal – which is the primary source of energy in the

country – and has healthy reserves of untapped oil and gas. In addition to hydrocarbons, South Africa

also possesses huge potential for renewable energy, which has increased dramatically in recent years

through the world-leading REIPPP programme and, under the Integrated Resource Plan, is expected

to rise to almost 25% of total energy production by 2030. In the 1.8GW Koeberg facility, South Africa

boasts the only commercially operating nuclear plant in sub-Saharan Africa.

8.2 Hydrocarbons

8.2.1 Overview

• Upstream oil and gas production is in decline having fallen by over half since 2010, largely due to a

lower oil price and lack of exploration. However, a new major discovery in 2019 has brought new hope

for a recovery within the sector.

• With vast reserves, coal looks certain to remain South Africa’s primary energy source for the

foreseeable future – as outlined in the 2019 Integrated Resource Plan.

8.2.2 Key Agencies

PetroSA

The government-owned oil and gas company has been given the mandate by cabinet to lead

developments in gas infrastructure in the Western Cape.

Petroleum Agency of South Africa

Has the responsibility to promote the exploration and exploitation of natural oil and gas, both onshore

and offshore, in South Africa and to undertake the necessary marketing, promotion and monitoring of

operations. Widely respected within the industry, the Petroleum Agency was at one stage threatened

with closure under proposals to treat oil and gas the same as mining under controversial proposed

amendments to the Mineral and Petroleum Resources Development Act (MPRDA). Mineral resources

and energy minister Gwede Mantashe said in November 2019 that the new petroleum bill established

oil and gas “as a sector of the economy standing alone, not as an appendage of mining”

Key resources statistics

Oil: 136,000b/d (production), 15m bbl (reserves)

Gas: 32 bcf (production, 2016)

Geothermal potential: unknown

Hydro potential: 14,000GWh/yr

Wind potential: 7.73m/s (100 metres)

Solar potential: 2,500kWh/m2/yr

Section


9. Competitive landscape

9.1 Overview

Although the vast majority of national power generation comes from state utility Eskom, the

transformational REIPPP programme has seen private participation in South Africa’s energy space

expand dramatically: in the years 2010 to end-2020, the contribution from IPPs to total installed capacity

is expected to have increased by over threefold, from 4.6% to 14.7%, (a change from 2.1GW to 8.9GW).

In line with the progress of the REIPPP, renewable energy also made significant gains during this period,

and by end-2020 is expected to have risen to 9.5GW from 2.3GW in 2010.

9.2 Landmark power projects

Largest power plant: Medupi Coal

Location: Lephalale

Capacity: 4,764MW

Fuel: Coal

Technology: Pulverised coal

Ownership: State-owned Connection type: On-grid

Commercial operations date: Unit VI online 23 August 2015, unit V online 3 April 2017, unit IV online28 November 2017, unit III online 28 June 2019, unit II online 26 November 2019, Unit I expected June

2020.

Long delayed project comprising six dry-cooled supercritical 794MW boilers with turbo-generators

covering a 700ha site, with a further 1,000ha required for ancillary services. Units II-VI are currently

operating, although performance has been well below expectations. Medupi was designed to produce

around 3,200GWh/yr of electricity but it is uncertain whether this will be achieved.

The project has suffered major delays due to technical errors and industrial action. A combined $5.6bn

contract to supply 12 boilers to Medupi and Kusile was won by Hitachi following a controversial tender

in 2007, before being transferred to Mitsubishi Hitachi Power Systems Africa Ltd, a joint venture with

Mitsubishi Heavy Industries. GE’s Steam Power Systems provided EPC services for turbine islands and

air-cooled condensers. Coal is supplied by Exxaro Coal’s Grootegeluk coal mine, which also supplies

Eskom’s Matimba power plant, through agreements signed in 2008.

The plant was expected to achieve thermal efficiencies of up to 37.5%, however, technical design flaws

have been blamed for chronic under-performance. The New Development Bank approved a $480m

loan in April 2019 to support a $2.75bn project to retrofit the plant with flue gas desulphurisation units

to reduce sulphur dioxide emissions from 3,500 mg/m3 to 500 mg/m3.

Several incidents of coal conveyor-belt malfunctions have resulted in Eskom looking to redesign the

coal-handling system. Design modifications at the power plant have already faced significant delay due

to the poor performance of the fleet as a whole. Eskom chief operating officer Jan Oberholzer said on

Section


10. Transmission and distribution

10.1 Overview

• South Africa’s transmission and distribution

infrastructure is well developed by sub-Saharan

African standards, with the overall network

covering the vast majority of the country. It boasts

the largest power line system on the continent

and has over 23,000km of transmission lines with

a voltage of 400kV or above.

• Eskom accounts for about 40% of electricity

distribution throughout South Africa, while

municipalities account for the balance, some

80% of which is distributed by 12 metros and the

largest municipalities.

• Electricity access rates are high at around

85%, although access rate growth has stagnated

since 2011.

• There are around 2.2m South African

households lacking electricity. Electricity access

is substantially lower in rural areas, which have an

average rate of approximately 66%, compared to

an urban access rate of 93%.

• Network losses of 9.7% in 2019 are relatively

low compared to South Africa’s regional peers.

• A key member of the Southern African Power

Pool (SAPP), there are cross-border

interconnections running to eSwatini and

Lesotho, as well as neighbouring Botswana,

Namibia and Mozambique.

• Two key cross-border projects are in

development: the Mozambique-Zimbabwe-South

Africa (MoZiSa) and Botswana-South Africa

(BoSa) projects. Once completed – planned for

2022 – these will allow greater trading within the

SAPP.

• Despite suffering from load-shedding and a

supply deficit, South Africa exports more

electricity within Southern Africa than it imports.

Transmission and distribution

infrastructure statistics

Network length: 387,633km

Network voltage: Transmission:

765kV (2,784km)

533kV (1,035km)

400kV (19,421km)

275kV (7,218km)

220kV (1,351km)

132kV (889km)

Distribution:

>132kV (24,666km)

44-88kV (20,735km)

Substation capacity: 297,521MVA

Existing

interconnections: Botswana: (3x132kV

& 1x400kV)

Namibia: (2x220kV

& 1x400kV)

Mozambique:

(1x110kV, 1x275kV,

1x400kV & 1x533kV

DC)

eSwatini: (2x132kV

& 2x400kV)

Lesotho: (1x132kV)

Planned

interconnections: Botswana (BoSa):

(400kV)

Zimbabwe/

Mozambique

(MoZiSa): (400kV)

Section


12. Demand and supply outlook

12.1 Overview

According to African Energy Live Data, South Africa had an on-grid installed capacity of 56,392MW as

of end-2019.

However, the performance of Eskom’s fleet of coal power plants has deteriorated due to poor

maintenance, accidents and fuel supply challenges. In 2019, the availability levels of the fleet stood at

just 69%, far below the 80% target. This has resulted in widespread load shedding. Eskom’s grid system

evaluation report – the Medium-term System Adequacy Outlook (MSAO) – recommends that the current

generation output must stay above 73% availability to adequately service peak demand. Any significant

increase in demand, continued fuel supply issues or plant deterioration will result in peak demand being

unmet.

South Africa’s on-grid energy mix is heavily reliant towards coal (73%) given the country’s wealth of the

resource and its prioritisation in energy policy. Renewable generation has grown in recent years through

the REIPPP, with solar (3.6%), wind (3.8%) and hydro (6.4%) all becoming more established. Nuclear

power (3.2%) has had significant backing from Eskom and the government in recent years and new

nuclear capacity remains on the agenda despite the sector’s parlous financial situation. Liquid fuels

such as diesel (6.1%) are utilised as peaking plants, available to balance the grid in times of high

demand.

Private participation in South Africa has been slow to materialise, with the first IPPs, Avon and Dedisa

diesel plants, procured in 2010. Government policy around private involvement in the power sector has

been ambiguous post-apartheid, with ambitious plans frustrated by limited implementation, hesitant

decision making and resistance from Eskom and other interest groups, notably the unions and coal

miners. The government has initiated numerous IPP procurement rounds for renewables and coal since

2011. However, as of end-2019, IPPs only account for 9.6% of total on-grid generation.

Demand has stagnated in recent years with poor economic growth, the threat of load shedding, the

flight of customers off the grid to distributed generation – which is likely to grow – and the lack of energy

intensive industries particularly in the mining sector.

According to the 2019 Integrated Resource Plan, South Africa’s short-term energy mix is unlikely to

change dramatically. Coal will continue to dominate generation up to 2024. Renewables are expected

to play a larger role in the sector as the country prepares the fifth REIPPP round. Nuclear energy

generation has been extended beyond 2024 and diesel is to be replaced by natural gas.

The government’s immediate focus will be to procure an additional 2-3GW of power through the risk

mitigation procurement programme to reduce load-shedding and diesel expenditure. A government

request for information about the programme in December 2019 stated power should be procured from

projects with short lead-in times of between 3-6 months or 6-12 months. Priority will be given to projects

that are currently under development and are baseload, mid-merit or peaking.

Supply side performance will hinge on the current reform efforts at Eskom and timely and effective IPP

procurement. An unbundled utility will help to facilitate competition and provide the sector with a more

Section


13. Data tables

Methodology

The following data tables show historical and

forward-looking data on installed, on-grid

capacity from 2010 through to 2024. The figures

are produced using data sourced from African

Energy Live Data, a platform containing over

6,500 operating, under construction and

planned generation projects across the

continent.

The pipeline (2020-2024) displays installed on-

grid capacity at years-end, and only includes

those generation projects which are in

development and are considered to have a

realistic prospect of reaching commercial

operations within the announced timeframe. A

full listing of projects on which these aggregated

figures are based is also included.

Renewables vs non-renewables(MW) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Hybrid 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Non-renewable 43,116 43,116 43,116 43,116 42,816 43,945 44,615 47,003 47,003 48,591 51,785 52,585 54,285 54,285 54,285

Renewable 2,268 2,268 2,271 2,353 3,835 4,444 6,338 7,542 7,661 7,801 9,290 10,065 10,165 10,165 10,165

(%) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Hybrid 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non-renewable 95.0 95.0 95.0 94.8 91.8 90.8 87.6 86.2 86.0 86.2 84.8 83.9 84.2 84.2 84.2

Renewable 5.0 5.0 5.0 5.2 8.2 9.2 12.4 13.8 14.0 13.8 15.2 16.1 15.8 15.8 15.8

Non-renewableRenewable

20242010 2018

https://www.africa-energy.com/live-data

https://www.africa-energy.com/live-data

Section


Power plants: Operating (as of March 2020)

Project nameInstalledcapacity(MW)

Fuels TechnologiesCommercialoperationsdate

Acacia Diesel 171.00 Diesel Open cycle gas turbine (OCGT) 1976

Adams Solar PV II 75.00 Solar Photovoltaic (PV) 2017

Amakhala Emoyeni Wind Phase I 134.40 Wind Wind 2016

Ankerlig Diesel 1,338.30 Diesel Open cycle gas turbine (OCGT) 2007, 2009

Aries Solar PV 10.00 Solar Photovoltaic (PV) 2014

Arnot Coal 2,100.00 Coal Pulverised coal (PCF) 1971-1975

Athlone Jet Fuel 36.00 Other fuel oils Open cycle gas turbine (OCGT) 1973

Atlantic Centre and Park-a-Lot Rooftop Solar PV 0.49 Solar Photovoltaic (PV) 2015

Aurora Rietvlei Solar PV 10.35 Solar Photovoltaic (PV) 2014

Avon Diesel 670.00 Diesel Open cycle gas turbine (OCGT) 2016

Bethlehem Hydro 7.00 Hydro Conventional hydro 2007-2010

Bokpoort CSP 50.00 Solar Parabolic trough 2016

Boshof Solar PV 60.00 Solar Photovoltaic (PV) 2014

Camden Coal 1,561.00 Coal Pulverised coal (PCF)1967-1969,2005-2007

Chaba Wind 21.53 Wind Wind 2015

Clanwilliam Hydro 1.50 Hydro Conventional hydro 2014

Coega IDZ Wind 1.80 Wind Wind 2010

Collywobbles Hydro 42.00 Hydro Conventional hydro 1985

Cookhouse Wind 138.60 Wind Wind 2014

Darling Wind 5.20 Wind Wind 2008

Dassiesklip-Klipheuwel Wind 27.00 Wind Wind 2014

De Aar Solar PV 50.00 Solar Photovoltaic (PV) 2014

Dedisa Diesel 335.00 Diesel Open cycle gas turbine (OCGT) 2015

Diepsloot Wastewater Methane 1.10 Methane Undecided or unknown 2012

Dorper Wind 100.00 Wind Wind 2014

Drakensberg Pumped Storage 1,000.00 Hydro Pumped storage 1981-1982

Dreunberg Solar PV 75.00 Solar Photovoltaic (PV) 2014

Droogfontein Solar PV 50.00 Solar Photovoltaic (PV) 2014

Durban eThekwini Landfill Gas 8.00 Biomass Open cycle gas turbine (OCGT) 2006-2009

Duvha Coal 3,600.00 Coal Pulverised coal (PCF) 1980-1984

Dyason's Klip Solar PV I 75.00 Solar Photovoltaic (PV) 2020

First Falls Hydro 6.00 Hydro Conventional hydro 1990

Gariep Hydro 360.00 Hydro Conventional hydro 1971, 1976

Gibson Bay Wind 111.00 Wind Wind 2017

Gouda Wind 135.10 Wind Wind 2015

Gourikwa Diesel 746.00 Diesel Open cycle gas turbine (OCGT) 2007-2008

Grassridge Wind 60.00 Wind Wind 2015

Greefspan Solar PV 10.00 Solar Photovoltaic (PV) 2014

Grootvlei Coal 1,180.00 Coal Pulverised coal (PCF)1969, 1977,2007-2011

Hendrina Coal 1,893.00 Coal Pulverised coal (PCF) 1970-1976

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Sample pages South Africa Power Report –2020/21 · 2 AFRICAN ENERGY • SOUTH AFRICA POWER REPORT...

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