Windlab and other major multinational wind development companies are investing in South Africa's energy market in the belief that wind power will play a significant role in the nation's fuel mix.

South Africa has abundant wind resources,  an urgent requirement for additional generation capacity and  a competitive feed in tariff. For all this we must now question whether the market is under threat due to severe under-estimation of the wind potential.

Current estimates of South Africa's potential wind capacity varies greatly, from 3 GW to 70 GW.

There is political support for renewable energy in the country; the South African government has set a target of 10,000 GWh of renewable energy by 2013, produced mainly by biomass, wind, solar and small scale hydro.

However the targets set for wind energy are small. In the short term, the renewable energy plan only includes 500 MW of wind power until 2013, of which 400 MW would be commissioned from independent power producers.

This underestimates the IPPs electricity generation potential. By early 2010, the South African electricity public utility Eskom had already received applications in excess of 10.5 GW for grid connections for wind power projects in South Africa. Windlab's own view is that 8,000 MW is an achievable target by 2020.

We estimate that at least 8,000 MW of wind power could be fed into the grid without significant extra cost or impact on security of supply. Assuming a capacity factor of around 30%, this would contribute over 20,000 GWh of energy per year to the South African market, double the current conservative target from all sources of renewable energy by 2013.

Wind power's potential to contribute to capacity needs in South Africa is being considerably under-estimated by the planning and regulatory authorities. A bolder approach with more ambitious targets would help South Africa to move to a low-carbon economy at a much faster rate. The wind resource is there, companies like Windlab are willing to invest, but is the political will sufficient to create a long term future for this industry?