South Africa’s state-owned utility Eskom has announced the creation of a standalone renewable energy business unit.

In addition, the South African government has endorsed a power plan that targets an ambitious 42 per cent of new electricity production coming from sustainable sources. This has given support to both renewable energy investors and companies involved in building and operating the smart grids required to coordinate intermittent renewable energy.

But the development of renewable energy faces obstacles, despite the government’s attempt to draw investors into the sector with a renewable energy feed-in tariff (REFIT). The national energy regulator NERSA has also reduced some subsidies. For example, the photovoltaic subsidy has fallen from $0.59/kWh to $0.35/kWh.

South Africa will continue to look to coal for baseload power, said Dipuo Peters, the country’s energy minister.

“It would be wrong of me to tell the 25 million South Africans who lack electricity that we would never use coal,” he said.

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