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South Africa Power Report 2021/22


23 Jun 2021

South Africa’s electricity supply industry is facing major challenges. New capacity additions have been insufficient to arrest the decline in electricity generated, and despite a fall in demand severe load shedding has been imposed. This is against the backdrop of coronavirus which has placed a heavy burden on the economy.

African Energy’s South Africa Power Report 2020/21 assesses the causes and symptoms of this crisis from political power struggles, governance issues and the long list of policy documents that are supposed to guide the ESI's future direction – but where in many cases ambitions are unfulfilled – to the country’s huge potential for renewable energy and the pressures of ensuring a ‘just transition’ away from coal.

Revised in June 2021, our five-year supply and demand projection shows that dispatchable generation may be insufficient to meet peak demand by the middle of the decade. An improvement in the performance of Eskom’s fleet, or a glut of new renewable generation, will be required if load shedding is to be avoided in the medium term. However, new rules on licensing could lead to a boom in the distributed generation market and the closing of the supply and demand gap.

About the 2021/22 edition

A comprehensive guide to the risks, realities, opportunities and threats associated with entering South Africa’s electricity industry.

New features of the 2020/21 edition of this report include:

  • A special chapter examining the growing C&I market;
  • Details and expected impacts of recently announced procurement drives, including the latest on the Risk Mitigation IPP Procurement programme and the upcoming fifth, sixth and seventh windows of the REIPPP; and
  • A new five-year supply & demand analysis.
     

Benefit from independent power generation forecasts based on the actual project development pipeline, with data drawn from African Energy Live Data – our proprietary database of more than 6,500 power projects and plants.

Request a PDF factsheet covering key findings for supply and demand and the C&I market

 

Watch the report's lead authors discuss South Africa

Head of consultancy David Slater was joined by power editor Dan Marks and African Energy founder Jon Marks for a discussion of the research undertaken for the report and the outlook for the South African electricity supply industry.

Read Jon Marks' recent View on South Africa - Reforms can gain impetus only if South Africa emerges from political standoff

Key features
  • Critical analysis of power market structure, procurement programmes and the governing policies and regulations.
  • Detailed demand and supply analysis – including an assessment of energy availability vs installed capacity and a detailed five-year outlook.
  • In-depth look at the C&I market.
  • Comprehensive information on in-development generation projects and profiles of key players in the sector.
  • Resource availability assessment – including coal, gas (domestic and imported), solar, wind and hydrogen potential.
  • Analysis of South Africa’s T&D sector- extent of grid, reforms, plans plus interconnections and SAPP competitive market.
  • Examination of the political environment including profiles of leading ANC and opposition figures.
  • Assessment of governance, including ongoing actions to tackle historic and systemic political corruption scandals.
  • An overview of the macroeconomic climate and outlook, including the impact of Covid-19, the country’s ‘junk’ Sovereign rating status and its long road back to investment grade.
Your questions answered
  • What impacts will Covid-19 have on the energy sector?
  • How will government planning address the expected electricity supply shortfall?
  • What steps are being taken to unlock the C&I market?
  • When will new IPP and other capacity be added?
  • Does coal have a continued role to play?
Contents

1. Executive summary

2. Risk Management Index

3. Political overview
3.1. Structure of government
3.2. Stability of the political system
3.3. The main political parties
3.4. Elections
3.5. Corruption
3.6. Security risks
3.7. Political economy and major policy initiatives

4.0 Macroeconomic overview
4.1. Overview
4.2. Reform and missed targets
4.3. A very difficult outlook
4.4. Economic structure and (stunted) growth
4.5. Inflation and the central bank
4.6. Fiscal deficit and debt: compounded by Covid-19
4.7. The 2021/22 budget
4.8. Balance of payments
4.9. Foreign reserves and the rand
4.10. Credit ratings
4.11. Key lending rates
4.12. Local market liquidity
4.13. WBG Ease of Doing Business

5.0 Power sector overview
5.1. Overview
5.2. Market structure
5.3. Key institutions
5.4. The South African ESI: A short sector history
5.5. Main consumers of electricity
5.6. Regional electricity trade
5.7. Eskom and the ESI crisis
5.8. Independent power producers
5.9. Off-grid including SHS and C&I
5.10. Challenges facing the ESI

6. Policy
6.1. Major Legislation
6.2. ESI plans and policies

7.0 Regulation
7.1. Legal requirements
7.2. Procurement
7.3. Tariffs
7.4. Currency risk

8. Demand and supply analysis
8.1. Overview
8.2. Key factors influencing demand
8.3. Demand forecasts
8.4. Key factors influencing supply
8.5. Supply forecasts
8.6. African Energy medium-term capacity projection

9. Resource availability
9.1. Hydrocarbons industry overview
9.2. Key industry agencies
9.3. Legislation
9.4. Licensing
9.5. Crude oil
9.6. Natural gas
9.7. Coal
9.8. Geothermal
9.9. Solar
9.10. Wind
9.11. Hydroelectric power
9.12. Uranium
9.13. Hydrogen

10. Transmission and distribution
10.1. Overview
10.2. Critical issues facing the network
10.3. Sector reforms
10.4. Planned grid improvements
10.5. Regional trade
10.6. Electricity imports and exports

11. Commercial & industrial market
11.1. Market overview
11.2. Routes to market
11.3. Policy direction
11.4. Regulation
11.5. C&I tariffs
11.6. Corporate PPAs
11.7. C&I project profiles

12. Competitive landscape
12.1. Overview
12.2. Landmark power projects
12.3. Under construction generation projects (as of February 2021)

13. Installed capacity data

14. Power generation projects

Download the report's detailed contents list

Reasons to buy

  • Understand the main legal requirements project developers and investors in South Africa’s ESI need to consider.
  • Identify the risks – Many of the issues confronting the South African polity, its business environment and society are systemic. The report examines political power struggles, corruption and governance issues, plus the impact of Covid-19, the country’s ‘junk’ sovereign credit rating status and its long road back to investment grade.
  • Evaluate the progress of sectoral reform – The South African ESI has had a long list of policy documents that are supposed to guide its future direction. In many cases their ambitions are unfulfilled. The report examines each policy to provide context to the current direction of the sector and underline the major gaps in policy.
  • Recognise the opportunities for your business- The report outlines the strengths and weaknesses of procurement programmes, the future of coal plants as the energy mix evolves and the country’s growing C&I sector.
  • Understand the energy transition – the report examines the opportunities and pressures of ensuring a ‘just transition’ away from coal, putting into context the country’s huge potential for renewable energy, outlining the potential role of gas and LNG-to-power and examining the role of unions, Eskom and political players.
  • Clear analysis of the C&I market – providing need-to-know information on the current and potential market size, policy direction, regulatory requirements, tariffs and corporate PPAs.
  • Assess supply and demand scenarios– South Africa’s supply-demand balance is a top political issue. Despite the impact of the coronavirus pandemic on lowering demand, 2020 saw some of the worst load-shedding the country has seen. African Energy assesses the causes of this crisis, including energy availability, and uses its own proprietary power database – African Energy Live Data – to provide a medium-term assessment of installed capacity projections to 2025, based on projects that have already been announced and upcoming procurement rounds.

South Africa Power Report 2021/22

Published:

Price: £2,995

Format: PDF

Pages: 161

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