Renewable Energy investment in South Africa is increasing as countries in the Southern African region turn increasingly to renewable energy to enhance energy security. There are many investors coming into the African market, but there is a need for more bankable projects, while the IEA suggests market access and investment risks keep finance costs elevated.
The attractiveness of the renewable market is strongly dependent on the regulatory framework and market design but there is no longer any need to provide high levels of incentives for solar PV and onshore wind. Decreasing renewable energy prices is resulting in a natural tendency towards increasing renewable energy share of a country’s portfolio. This is likely to be supported by international environmental low carbon policy developments leading to phasing out of fossil fuel subsidies and increasing carbon pricing mechanisms.
SADC structures such as the South African Power Pool (SAPP) the Regional Energy Regulators’ Association (RERA) and the SADC Centre for Renewable energy and energy efficiency (SACREE) are geared towards increasing regulatory certainty, while a number of international initiatives are focused on providing an enabling environment.