Top Africa Renewable Firm Sees South Africa Power Woes Persisting

Nov 14, 2022 by Bloomberg
image is BloomburgMedia_RLA656T0G1KW01_14-11-2022_05-45-16_638039808000000000.jpg

Electrical power lines above informal housing in the Imizamo Yethu settlement in the Hout Bay district of Cape Town, South Africa, on Wednesday, Aug. 3, 2022. South Africa's state-owned power utility Eskom Holdings SOC Ltd. warned it may have to implement rolling blackouts for the first time in more than a week due to a shortage of generation capacity. Photographer: Dwayne Senior/Bloomberg

Africa’s biggest renewable power company said it will take years for South Africa’s electricity supply woes to ease after the government’s bias toward coal led to the collapse of wind and solar energy manufacturers. 

That legacy is being exacerbated by global supply chain issues that are slowing the construction of renewable plants, Chris Antonopoulos, chief executive officer of Amsterdam-based Lekela Power, said in an interview.

South Africa is suffering its worst ever power cuts as the aging and poorly maintained coal-fired plants of state utility Eskom Holdings SOC Ltd. suffer frequent breakdowns. Under President Cyril Ramaphosa, the continent’s most industrialized country is  now pushing for more renewable energy, but it’s still reliant on coal for more than 80% of its power. 

“There were two or three years when Eskom was arguing that coal was better and cheaper,” Antonopoulos said. In this period, where “nothing happened, a lot of the local industry collapsed,” he said.

During a five-year period when South Africa halted a program to acquire renewable energy for the grid, companies set up to make towers for wind turbines failed, and there is little local manufacturing capacity for solar panels.

“That cannot be reestablished from one day to another,” Antonopoulos said, adding that it will take two to three years before the wind and solar plants ordered by the government start to improve the power situation. “The current government is doing a lot. I am so happy that they have changed.”

Government-run auctions for the provision of renewable energy have restarted and have been increased in size. Ramaphosa has also changed regulations around the construction of power plants for private use, paving the way for mining and manufacturing companies to either build or commission their own capacity. 

Lekela, which is in the process of being acquired by Africa Finance Corp. and Egypt’s Infinity Group, operates wind power plants with a capacity of 624 megawatts in South Africa. It plans to bid in future renewable energy auctions in the country, and also has facilities in Egypt, Senegal and Ghana.

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By Antony Sguazzin

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