Nedbank CIB energy finance principal Duncan Abel tells Engineering News that the market has already expanded materially from close to zero only five years ago, in spite of ongoing regulatory uncertainty. Liberalisation of the grid, wheeling and battery storage will further fuel rapid growth, he asserts.
The bank is also a leading financier to South Africa’s utility-scale renewable energy programme, with over R35-billion committed to funding such projects.
The growth in SSEG has been underpinned by a sharp fall in the cost of solar photovoltaic (PV) technology in particular, as well as a desire among South African companies for tariff certainty in a context of ongoing, above inflation, Eskom hikes and load-shedding.
Abel says there is significant pent-up demand for small-scale deployments, which have hitherto been restricted mostly to sub-1 MW projects, owing to regulatory uncertainty regarding the licensing of larger plants.
Even absent any possible change to the regulations, Abel anticipates that demand will continue to increase strongly.