Standard Bank has announced its significant role in supporting decentralized electricity projects in South Africa. The bank reported funding projects with a combined capacity exceeding 500 megawatts over the past two years. This development follows regulatory changes that now allow such projects to proceed without requiring a license.
Operation Vulindlela, the entity overseeing these regulatory reforms, recently revealed that the pipeline of private renewable energy projects now stands at an impressive 22,500 MW. Efforts are currently underway to eliminate grid-related obstacles that hinder further investments.
In the years 2022 and 2023 alone, Standard Bank financed decentralized projects with a total capacity of 368 MW. This includes three utility-scale developments. These projects are a solar PV facility at African Rainbow Minerals’ platinum operations, developed by Sola Group and African Rainbow Energy and Power, capable of producing 270 GWh annually. Additionally, there is the 68 MW Cennergi Lephalale solar project, which powers Exxaro’s Grootegeluk coal mine, and Seriti Green’s 155 MW wind project, which is currently under construction.
According to Rentia van Tonder, Standard Bank’s head of power, the ongoing developments in the market, including provisions in the Electricity Regulation Amendment Act for power traders and aggregation, will significantly boost decentralized energy models in South Africa. She noted, “We are seeing businesses investing in wheeled power solutions through aggregation or bilateral arrangements, combining those with off-grid solutions where relevant, towards energy security.”
Despite this focus on decentralized energy projects, Standard Bank continues to play an active role in the public procurement of renewable energy. Since the inception of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in 2011, the bank has committed over R250 billion to projects procured under this program. These investments highlight the bank’s commitment to supporting South Africa’s transition to renewable energy and enhancing energy security. The move towards decentralized electricity projects comes at a critical time as the country grapples with frequent power outages and an overburdened national grid.
The solar PV facility at African Rainbow Minerals’ platinum operations stands as a testament to the potential of renewable energy in powering industrial operations. Developed by Sola Group and African Rainbow Energy and Power, this facility is expected to produce 270 GWh annually, contributing significantly to the country’s renewable energy capacity. Meanwhile, the Cennergi Lephalale solar project, with its 68 MW capacity, provides essential power to Exxaro’s Grootegeluk coal mine. This project exemplifies how renewable energy can support and enhance traditional mining operations, ensuring a reliable power supply while reducing the carbon footprint.
Seriti Green’s 155 MW wind project, currently under construction, represents another significant step towards expanding South Africa’s renewable energy infrastructure. Wind energy, along with solar power, forms a crucial part of the country’s strategy to diversify its energy mix and reduce reliance on fossil fuels. The regulatory reforms spearheaded by Operation Vulindlela have been instrumental in facilitating these projects. By removing the requirement for licenses, these changes have streamlined the process for developing decentralized electricity projects, encouraging more private investment in renewable energy.
This regulatory environment, coupled with the financial support from institutions like Standard Bank, creates a favorable landscape for the growth of renewable energy in South Africa. It also aligns with global trends towards decentralization and renewable energy adoption as countries worldwide seek to combat climate change and enhance energy security.
