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Seven thoughts on kickstarting offshore wind in South Africa

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Published Date
Nov 23, 2023
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Alessandra Pardini explores the potential for offshore wind in South Africa and the possibility of kickstarting this nascent industry, as well as some of the legal and environmental hurdles the industry will need to overcome.

South Africa has big potential for offshore wind

South Africa could produce up to 901GW of power from both floating and fixed seabed-mounted offshore wind, according to a report from the World Bank1. Much of this opportunity is centered around the Western Cape, with areas like Saldanha, Cape Town, Hermanus and Mossel Bay all highlighted as having some of the highest potential.

This could help diversify South Africa’s energy mix away from coal, alleviate grid constraints and help boost energy security in Africa’s most industrialized nation.

The geography of the coastline is a challenge

But getting anywhere near that potential will be a massive task as there are real technical challenges to overcome.

South Africa has a relatively deep coastline and some of the strongest ocean currents in the world. That deep coastline means that the vast majority of South Africa’s potential offshore wind production would need to be provided by floating turbines, where huge turbines are constructed on land, towed to site and tethered to the seabed. The World Bank estimates that floating turbines could produce up to 852 GW of South Africa’s 901 GW of potential wind power.

Yet floating turbine technology is still in its infancy, with only a handful of pilot projects in operation across the world. Floating turbines require infrastructure including floating substations, ports that are large enough to handle the huge turbines, as well as greater use of deep-sea cabling. All of this adds expense and complexity to projects.

There are regulatory hurdles to overcome, but the industry can rely on know-how from the oil and gas sector

Offshore wind projects may be relatively common in Europe and China, but they are still novel in South Africa.

This means that first-movers will need to navigate complex regulations and bureaucratic regulators in order to get projects off the ground. This will include, among others: obtaining marine leases permits through the Integrated Coastal Management Act; dealing with civil aviation concerns; as well as taking account of Marine Special Planning considerations.

But all of this is not without precedent. Developers can leverage considerable experience from South Africa’s offshore oil and gas sector, as well as companies that have been involved in large under-sea cabling and green hydrogen projects to inform how they structure project companies, reduce risk and tackle regulation.

Collecting high quality data will be critical

Offshore wind projects typically cost at least double the price of onshore wind projects to construct with prices for floating turbines projects even higher. But offshore turbines have larger blades than onshore turbines, meaning they have a higher generating capacity.

Given the challenges of South Africa’s coastline, collecting good quality data on seismic conditions, wind and wave speeds will be crucial in deciding what offshore projects are financially (and technically) viable.

Aside from this sort of technical data, developers will also need to collect a wide array of environmental and socioeconomic information in order to submit environmental impact assessments needed by regulators to sign off on such projects.

This could include collating several years’ worth of data on the impact of turbines on marine birds, bats and other mammals, as well as on how systems would affect ecosystems, tourism and fishing in the longer term. All of this will take time and money; it is not uncommon for impact assessments to take up to three years.

It was worth investing considerable resources in the data gathering exercise. International investors who may provide project financing are often worried about ESG impacts of offshore projects, so high quality impact assessments that adhere to globally recognized best practices can go some way to alleviating these concerns and securing investment.

Question marks remain over who will buy the energy

A big unknown remains who the offtaker for these projects will be.

The most obvious solution would be for the South African government to purchase the power and feed it directly into the national grid. Unfortunately, the current Integrated Resource Plan for New Generation Capacity does not recognize procurement from offshore wind. The Department of Energy’s much anticipated (and delayed) Integrated Resource Plan 2023 may change this, though developers are not holding their breath.

The second and more feasible option is for the private sector to purchase this potential off-take. But who?

Hydrogen, green ammonia and Sustainable Aviation Fuel producers are likely to be particularly interested in purchasing electricity made from renewables (even at significant cost) and because these producers are often located in ports, this makes a lot of sense.

It also solves the current transmission constraints that prevent many of these producers from securing renewable energy off take.

Engagement with stakeholders will be needed at every stage

Last year’s decision by a South African court to halt Shell’s exploration of the Wild Coast still looms large in the public consciousness. The court sided with residents who said they had not been properly consulted about Shell’s exploration of the seabed, with many concerned about the impact the company would have on marine life.

Developers will need to spend significant time engaging with various groups, including indigenous peoples and small-scale fisheries, to address concerns that offshore wind can be built without causing significant harm to the environment and local industries.

Offshore wind has a lot of promise, but is not a silver bullet

While there is considerable opportunity for offshore wind in South Africa, our panelists agreed that the technology would not be a quick fix or ‘silver bullet’ for South Africa’s energy crisis.

Instead, over the longer term, offshore wind has the potential to be a highly useful tool to diversify its energy mix and boost it's energy security.

The contributors include Stuart Heather-Clark, Africa Power Sector lead from sustainability consultancy SLR Consulting; James Larmuth, a renewable energy specialist from engineering and advisory firm Zutari; and Gillian Niven at Niven Attorneys.

Footnote

1 https://documents1.worldbank.org/curated/en/337531586894229468/pdf/Technical-Potential-for-Offshore-Wind-in-South-Africa-Map.pdf

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