South Africa puts wind at risk with 'refit' rate cut

SOUTH AFRICA: South Africa has announced plans to reduce its renewable energy feed-in-tariff (refit) rate by 24 percent.

by Shem Oriere 25 March 2011

The Klipheuwel plant in South Africa, a demonstration project owned by state utility Eskom

Since the refit rate was introduced two years ago, it has been credited for attracting a number of wind developers to the South African wind market.

Companies such as Vestas, Goldwind and Wind Prospect have all opened offices in the country.

Now, the National Energy Regulator of South Africa (Nersa) proposes to reduce the refit rates for wind projects from $0.181/KWh announced in 2009 to $0.135/KWh in 2011, $0.136/KWh in 2012 and US$0.137/KWh in 2013. 

"We are now in the dark as how this affects the procurement process," South African Wind Energy Association chairman Mark Tanton was quoted saying yesterday.

South Africa has been leading the sub-Saharan foray into wind, with 45MW of generating capacity launched in the second quarter of 2010.