South Africa Small Wind Turbine Market

Market Overview

The South Africa small wind turbine market size was valued at USD 1,571.8 thousand in 2023 and is projected to reach a value of USD 4,033.1 thousand by 2032, registering a CAGR of 11.0% during the forecast period (2024-2032).

South Africa is seeing a rise in the small wind turbine market due to its efforts to diversify its energy sources, lessen its reliance on coal, and provide dependable electricity to rural and off-grid communities. In South Africa, small wind turbines could increase wind power generation and the nation's energy productivity. The government has proposed a significant increase in installed wind capacity, including off-grid small wind technology. With 41% of the installed wind capacity on the continent, South Africa has the most installed wind capacity. Since the early 1990s, South Africa has built more than 30,000 wind turbines in its desert and agricultural regions to supply water for domestic and agricultural uses.

Market Dynamics

South Africa Small Wind Turbine Market Drivers:

Favorable Wind Condition

South Africa's small wind turbine industry benefits from rich and reliable wind resources, particularly along its coastline and in Eastern and Western Capes. These excellent wind conditions provide an ideal setting for modest wind turbine installations, resulting in industry development and investment. The WASA map (The Wind Atlas of South Africa, n.d.) depicts a significant portion of the Eastern Cape Province with yearly average wind speeds of 7-8 m/s and wind power densities ranging from 300 to 600 W/m2. This makes the Eastern Cape a potential option for utility-scale wind farms.

According to wind resource evaluations undertaken by the South African Weather Service and the Council for Scientific and Industrial Research (CSIR), South Africa has a massive wind energy potential of over 70 gigawatts (GW), most concentrated around the coastline and in coastal provinces. The Western Cape, for example, has an estimated capacity of more than 18 GW, providing considerable chances for small wind turbine development.

South Africa Small Wind Turbine Market Restraints:

Grid Limitations

Small wind turbines provide a promising possibility for decentralized electricity generation in rural communities that do not have a connection to the national grid. However, the lack of grid infrastructure complicates linking these turbines to the current electrical system. This constraint affects the development of small wind projects and impedes efforts to enhance energy availability in disadvantaged areas.

For example, the Northern Cape region, which currently boasts the best wind resources in the country, has some of the most underdeveloped transmission networks. A lack of transmission capabilities hampers the development of wind projects in these locations, and state-owned power provider Eskom has been hesitant to construct infrastructure in these areas.

South Africa Small Wind Turbine Market Opportunity:

Rural Electrification Initiatives

South Africa's government has been working to electrify rural areas since 1994. The government has initiated three programs to reach this aim, and by July 2022, 92% of rural communities will have access to power. The government intends to boost access to 97% by 2025. The Department of Energy's Integrated National Electrification Planning (INEP) section manages the electrification initiative. From 1994 to 2010, the program connected more than 5.2 million households and 12,000 schools to the power grid.

Furthermore, South Africa's National Development Plan 2030 is aligned with the United Nations Sustainable Development Goals (SDGs 7), which include affordable and clean energy. Wind energy is regarded as a viable and acceptable renewable energy technology in South Africa, and microgrid solutions are offered to link rural populations to electricity.

Regional Analysis

The small wind turbine industry in South Africa is emerging as a viable sector, driven by the country's desire to diversify its energy mix, reduce dependency on coal, and offer dependable power to off-grid and rural areas. Small wind turbines in South Africa could help boost the country's energy productivity and wind power generation. South Africa's considerable wind resources, notably in the coastal areas and the Western Cape, make it a perfect location for compact wind turbine installations. These turbines are increasingly used in distant and off-grid locations with limited connection to the national grid, reducing energy poverty and providing reliable power. Installing tiny wind turbines in rural areas decreases reliance on diesel generators, lowering greenhouse gas emissions and air pollution. Small wind turbines (SWTs) are a potential option for rural electrification in Africa, where many villages need more electricity and have low population densities, making grid extension unprofitable. South Africa has over 100,000 wind pumps operating on more than 45,818 farms, and wind energy has emerged as a new frontier.

Additionally, South Africa has various policies that promote wind energy, such as the White Paper on Energy (1998), the Renewable Energy White Paper (2003), the Energy Act of 2008, and the National Climate Change Response White Paper (2011). Key policies include the 2010 Integrated Resource Plan (IRP), amended in 2013, and the Integrated Energy Plan. By 2030, the IRP aims to generate 17,800 megawatts (MW) of renewable energy, with wind energy accounting for 21% of the total.

Segmental Analysis

The South African small wind turbine market is segmented based on axis type, grid type, component, hybrid system, power, and application.

The market is further segmented by axis type into Horizontal and vertical Axes.

Horizontal-axis wind turbines currently dominate the small market and is predicted to experience a CAGR of 11.4% over the forecast period. The segment's increase is ascribed to its notable efficiency, scalability, and demonstrated performance. HAWTs are selected for their ability to generate power with high efficiency, especially in locations characterized by consistent wind patterns.

Based on grid type, the market is fragmented into Off-Grid and On-Grid.

The on-grid category takes over the small wind turbine market, with a 12.2% CAGR during the forecast period. Several converging reasons contribute to the segment's relevance, the most prominent of which is the growing emphasis on decarbonization and the move to cleaner, more sustainable energy systems. Small wind turbines incorporated into on-grid systems provide a versatile way to replace traditional grid electricity with renewable energy while reducing dependency on fossil fuels and lowering greenhouse gas emissions.

The market is sub-segmented based on components: Aerogenerators, Solar Photovoltaic Panels, Battery Banks, Charge controllers, and inverters.

Aerogenerators account for a significant market share, with a projected CAGR of 11.0%. Aerogenerators are the system's most essential and valuable component, capturing and transforming energy. Their ability to immediately convert wind energy directly impacts the system's total energy production. The aerogenerator has been the dominant entity in the small wind turbine market due to its significant contribution to energy production. The component is critical due to its effectiveness, technical improvements, and direct impact on the overall operation of the system.

The hybrid system divides the market into Wind-Solar Photovoltaic (PV), Wind-Diesel, Wind-Fuel Cell, and Wind-Hydro.

The wind-solar photovoltaic (PV) sector now dominates the market with a steady growth rate of 12.0% throughout the forecast period. Wind-solar PV hybrid systems harness the power of both wind turbines and solar panels to merge and utilize wind and solar energy. This hybrid system optimizes the mutually beneficial connection between wind and solar energy by harnessing solar panels to produce electricity during the day and wind turbines to create power at night and when the weather is cloudy. Due to its effective synergy and extensive adoption, wind-solar PV hybrid systems have emerged as the prevailing option in the small wind turbine hybrid market.

Based on power, the market is classified into Up to 5kW, 6kW-10kW, 11kW-20kW, and 21kW-50kW.

The average power capacity is up to 5kW, expected to grow at a CAGR of 11.7% over the indicated period. Residential and small-scale applications frequently use small wind turbines with power ratings of up to 5 kW. Individual homes, cabins, and small farms can all profit from the electricity produced by these turbines. They are trendy in rural and remote areas with limited or no power grid connection.

The market can be bifurcated by application into residential, commercial, agricultural, industrial, construction, infrastructure, telecommunication, government, and military.

Residential is one of the most substantial segments in the small wind turbine market, rising at a CAGR of 11.6% over the forecast period. The segment's expansion is driven by a convergence of variables highlighting the allure of decentralized energy generation and sustainability. Residential installations of tiny wind turbines have expanded significantly in recent years, driven by greater environmental awareness, a desire for energy independence, and technological developments that make these systems more accessible and efficient to homeowners.

Recent Developments

• December 2023- Vestas won a 63 MW order for a wind park in South Africa. 14 V150-4.5 MW wind turbines will be supplied and installed as part of the contract, including a 20-year Active Output Management 4000 (AOM 4000) service agreement.
• April 2024- Eskom and the National Transmission Company of South Africa (NTCSA) met all of the prerequisites for the merger and operationalization of the NTCSA