Plans progressing for 810MW offshore wind farm near Richards Bay

If all goes according to plan, the 810 megawatt (MW) Gagasi offshore wind farm, proposed off the coast of Richards Bay, could start supplying electricity to the grid in five years’ time.

However, a lot of work still needs to be done, according to Benjamin King and Madrè Delport, portfolio managers for the GenesisHexicon offshore wind programme, which includes the Gagasi project.

The GenesisHexicon joint venture (JV) has welcomed the recent release of the Strategic Framework for Offshore Wind Development in South Africa report, published by the South African government in collaboration with the World Bank.

Read: SA could become an offshore wind powerhouse – World Bank

The framework quantified the offshore wind opportunity at 95 gigawatts (GW) – almost double Eskom’s current installed generation capacity.

The JV has been working on Gagasi for about two years. It is currently preparing to resubmit its environmental scoping report after withdrawing the previous submission to incorporate technological advances.

In parallel, it is finalising the seabed lease agreement and engaging with potential offtakers.

Regulatory hurdles

King says while it is clear that the seabed belongs to the South African government, various authorisations are required from several entities at national and provincial level.

As this is the first application of its kind, roles and responsibilities still need to be clarified, which could take time.

The wind farm is planned to form a rectangle that runs parallel to the coast, with Richards Bay port opposite the southern end of the site. The nearest turbine in this section would be about 16km offshore, and the furthest about 22km.

Read: Time running out to salvage 23 rejected wind energy projects

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The northern section of the site is closer to the coast, with the nearest turbine about 5km to 6km offshore and the furthest approximately 10km away.

Current planning provides for 54 turbines, and the majority (600MW) will be fixed, with the balance floating.

R50bn-R60bn investment

Similar offshore wind developments in Europe require investments of between R50 billion and R60 billion, King says. Such projects typically take five to seven years to develop, with Gagasi now in its second year.

The developers hope to secure environmental authorisation next year, which could see the investment decision finalised in the next year or two.

If all goes well, construction could begin in 2030 and take between 12 and 18 months to complete, allowing the wind farm to begin commercial operations.

King says the project could also be developed in phases, enabling some turbines to start generating electricity before the entire wind farm is complete.

According to Delport, there is a lot of interest from potential offtakers and the JV is also considering a growing range of options, including with regards to the development of the South African Wholesale Electricity Market (Sawem).

95GW offshore opportunity

The new framework sees South Africa positioning itself as a potential offshore wind hub, with opportunities to develop a local supply chain and supplying to the rest of Africa, where the technology is still new.

Delport and King agree that offshore wind could diversify South Africa’s energy mix.

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At scale, it could also help smooth out intermittency since the wind patterns off the East and West coasts complement each other.

They say this technology offers an opportunity to establish a new supply chain and create significant job opportunities.

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According to the framework, offshore wind has the potential to support more than 300 000 full-time-equivalent job-years and contribute $6.7 billion in employment wages to the South African economy by 2050.

That is about R109 billion at current exchange rates.

Costs expected to fall

King says the cost per megawatt-hour of offshore wind generation would not be lower than that of onshore wind or solar photovoltaic (PV) power, but it is becoming increasingly difficult to get access to land to build utility-scale projects.

Add to that grid constraints and human activity on land, and offshore becomes an easier option for developments at scale.

He does expect a price path, like with other green technologies, that includes a risk premium for first movers with tariffs getting lower as the uptake increases and the industry matures in the South African market.

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This is what was seen in the UK, where offshore wind was initially priced at double the price of gas generation, but after 10 years of commercial deployment, it is now at the same level.

King says South Africa is an attractive market for offshore wind, given its strong wind resources, marine environment, the government’s stated ambition to reduce the country’s reliance on coal, and expectations of strong growth in electricity demand.

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