South Africa and US Face Economic Risks with Wind and Solar Focus

Electricity Challenges in South Africa and the US

According to Dr. Robert Jeffrey, an economist and energy expert, and Olivia Vaughan, a business strategist, South Africa's Integrated Resource Plan 2025 (IRP 2025) may undermine economic growth due to its emphasis on variable wind and solar electricity. The plan, approved by Cabinet in October 2025, aims to increase the share of renewable energy in the country's energy mix. However, the authors of the report argue that this approach will raise the cost of electricity and fail to deliver on South Africa's national priorities of poverty alleviation, inequality reduction, and improved living standards.

Technical Limitations of Wind and Solar

Solar PV achieves annual natural capacity factors of ~26% in South African conditions, while wind reaches ~35% in favorable locations. These figures reflect the inherent variability of natural resources, with solar producing nothing at night and minimal during cloudy days, and wind dropping to near-zero during prolonged calm periods. As Dr. Lars Schernikau, an international energy expert, notes, variable sources cannot guarantee dispatchable electricity without 100% backup from baseload generation in the form of coal, gas, or nuclear-generated electricity.

The cost of such backup increases with unpredictable wind and solar power in the system. Electricity storage systems in the form of batteries may be added, but they merely shift the problem by 1 to 2 hours and add to the total system cost. Ronald Stein, a engineer and columnist, points out that batteries need to be charged before they are available for use and that they lose energy for providing storage. This means that vast overbuild of wind and solar is required to supply demand as well as charge the storage systems at the same time.

Economic Implications

The True Cost of a Variable-Heavy System, as measured by the Full Cost of Electricity (FCOE) analysis, shows that high wind and solar pathways increase overall system costs compared to dispatchable-dominant systems. The FCOE incorporates intermittency, backup requirements, grid upgrades, overbuilding, and stability measures, providing a more comprehensive picture of the costs associated with wind and solar energy. As the authors of the report conclude, adding significant variable capacity on top of full dispatchable backup is economically redundant, physically wasteful, and harms the environment.

Original reporting by Watts Up With That.