South Africa Brings 273 MW Grootfontein Solar Project Online in Western Cape

South Africa has added a major new asset to its power system with the commercial operation of the 273-megawatt (MW) Grootfontein solar photovoltaic (PV) project in the Western Cape. The facility is the first project from Bid Window 5 of the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) to reach full commercial operation.

Developed by Norwegian renewable energy company Scatec ASA in partnership with local investors, the project is located approximately 150 kilometres north-east of Cape Town and is now the largest co-located solar PV facility in the Western Cape. Its commissioning comes at a critical time as South Africa continues to face electricity shortages, ageing coal infrastructure, and the need to diversify its energy mix.

Once fully operational, the Grootfontein solar plant is expected to generate around 700 gigawatt-hours (GWh) of electricity annually—enough to supply more than 180,000 households. The project is also projected to cut carbon dioxide emissions by approximately 630,000 tonnes per year, reducing reliance on coal-fired generation.

Industry observers view the completion of Grootfontein as a significant milestone for South Africa’s renewable energy programme. Bid Window 5, launched in 2021, experienced delays due to rising global equipment costs, supply chain disruptions, and grid connection constraints. The successful delivery of the project demonstrates that large-scale renewable developments can still reach completion despite these challenges.

Electricity generated by the facility is sold to state-owned utility Eskom under a 20-year power purchase agreement (PPA), providing long-term revenue certainty for investors and lenders. Since its launch in 2011, the REIPPPP has enabled South Africa to procure nearly 9 gigawatts of renewable energy capacity through multiple bidding rounds.

The project’s ownership structure reflects the localisation and transformation objectives embedded in the REIPPPP framework. Scatec holds a 51% stake, South African Black Economic Empowerment firm H1 Holdings owns 46.5%, while the remaining 2.5% is held by the Grootfontein Local Community Trust, ensuring direct community participation in the project’s long-term benefits.

In addition to electricity generation, the project is expected to deliver broader socio-economic benefits, including local job creation, procurement opportunities, and dividend flows to community stakeholders.

However, the project also highlights ongoing challenges related to grid integration. South Africa’s transmission network was originally designed around coal-fired power stations in Mpumalanga, far from the country’s prime renewable energy resources in the Northern and Western Cape. Eskom estimates that approximately R400 billion will be required over the next decade to develop more than 14,000 kilometres of new transmission lines, along with substations and battery energy storage systems.

Despite these constraints, solar PV continues to emerge as one of the lowest-cost sources of electricity in South Africa, with recent projects achieving levelised costs of around 3.6 US cents per kilowatt-hour. This cost competitiveness has made solar a cornerstone of energy planning across the African continent.

Energy analysts note that while a single project cannot resolve South Africa’s structural power challenges, each new renewable addition reduces dependence on emergency diesel generation and ageing coal units, lowering system costs and emissions over time.

The commissioning of Grootfontein further reinforces South Africa’s position as a reference market for renewable energy development in Africa, supported by transparent procurement processes, bankable contracts, and a stable policy framework. As electricity demand continues to grow across the continent, projects such as Grootfontein highlight the critical role of large-scale solar in closing Africa’s energy gap.