JUWI starts construction of 340 MW solar projects in SA

From the newsletter
A German-based renewable energy project developer, JUWI, has started construction of a combined 340 MW solar project in South Africa. The project includes 120 MW for Teraco Data Centres, 100 MW for Glencore Mine, and 120 MW for Sasol. Once completed, they will contribute around 5% to South Africa’s total solar PV capacity.

• The three projects will cumulatively cost more than $324 million, and the power will be wheeled through Eskom's (South Africa's national utility company) grid to the respective customers.

• JUWI has built over 20 solar PV and Battery Energy Storage Systems (BESS) projects globally. In Africa, two notable JUWI examples are the Sukari Gold Mine in Egypt and the Grande Côte mineral sands operation (GCO) in Senegal. 

More details

• The German-based company currently operates and maintains nine large renewable energy projects in Africa, totalling 574 MW, which generate nearly 1 million megawatt-hours (MWh) of electricity annually.

• The South African energy market has been attracting energy companies as it has suffered severe grid challenges and expensive electricity. Regulations in the energy space have since evolved to accommodate necessary changes, including creating an open electricity market and wheeling of power. This has enabled private generators to set up their plants, generate electricity, and sell it anywhere to any interested customer through power wheeling.

• These energy companies are mainly focusing on generating electricity from renewables to compete with the coal-based grid. Companies that are conscious of their emissions reductions and want to appeal to a wider market while reducing production costs are switching from the grid. 

• For example, the 100MW solar PV facility for Glencore Mine will provide green “no-carbon” energy to its ferrochrome smelters. This will help Glencore meet the European Union’s Carbon Border Adjustment Mechanism (CBAM) requirements on its ferrochrome exports.

• According to Dr. Rethabile Melamu, CEO of the South African Photovoltaic Industry Association (SAPVIA), “Solar PV alone can replace up to 40% of fossil fuel consumption. Adding battery storage can increase that share to 60%, while integrating wind energy alongside solar and batteries can achieve renewable contributions of 80–90%, often at costs comparable to fossil fuel-based systems.”

• Transitioning to a 24-hour renewable energy system won't happen overnight, but rather through a phased approach. The first phase can be to offset part of the users' demand, with the intermittency balanced by the grid. The second phase can involve 1-2 hour batteries and the third phase 24-hour dispatchable green energy through large-scale battery storage.

• As South Africa tries to keep its international market share, companies in the industrial and mining sectors will increasingly adopt renewable energy to appeal to customers. The automotive industry, in particular, which relies on export markets, will be among the many to adopt renewables. Some have already started. Ford’s Silverton Assembly Plant in Pretoria, which produces the Ranger pickup, sources 35 per cent of its electricity from a 13 MW solar plant and Volkswagen Group Africa added 3 MW of solar PV in 2024. Most recently, Daimler Truck's Atlantis Foundries signed a 13.5 MW power purchase agreement for solar power.

Our take

• South Africa's renewable energy space is more mature and is one of the fastest-growing in Africa. About 3 GW of solar capacity has been installed in the commercial and industrial sector alone in the last two years. With Eskom seeking to increase grid electricity by over 57% in the next three years, more customers will switch to self-generation to reduce energy costs.

• South Africa is recovering from the COVID-19 pandemic and the worst load shedding in 2023, which slowed down its economy. The AfDB projects a 1.6% growth in 2025, as new infrastructure investments support construction and recovery in other sectors. This is expected to push demand for more cheaper and cleaner energy.

• The energy space, having attracted both local and big international players like AMEA Power of Abu Dhabi and JUWI, among others, is set to see intensified competition. This will be an advantage for customers seeking to secure cost-effective power purchase agreements.