De Aar Wind Power Project shows exactly why economics decides the fate of renewable energy. When analysts talk about the continent’s transition to low-cost clean energy, the conversation rarely moves beyond incentives or subsidies. But the real story, the story that determines whether a renewable project survives or dies is economics: costs, output, capacity factor, lifecycle returns, and grid value.
Costs, output, capacity factor, lifecycle returns, grid value. And this is where the De Aar Wind Power Project in South Africa stands out as a case study every African country should be paying attention to.
The project cost: USD 352 million
Installed capacity: 244.5 MW
That means the project cost works out to: USD 1.44 million per MW
Globally, utility-scale wind projects average USD 1.3–1.6 million per MW meaning De Aar sits in the sweet spot of international cost benchmarks.
For context:
- Kenya’s Lake Turkana Wind Power: ≈ USD 2.1 million per MW
- Morocco’s Tarfaya Wind Farm: ≈ USD 1.65 million per MW
- U.S. onshore wind average: ≈ USD 1.5–1.6 million per MW
So De Aar is cost-competitive on a global scale.
Output: 770 Million kWh/Year
With 163 turbines generating ~770 million kilowatt-hours annually, De Aar delivers a capacity factor (real output vs theoretical output) of roughly 36%. This is extremely strong for onshore wind.
For comparison:
- Global average onshore wind CF: 30%
- South African average: 32–35% (CSIR energy reports)
- U.S. average: 35%
- Europe: 25–30%
A 36% CF means excellent wind resources + strong turbine performance → better economics → better financial returns → lower cost of electricity.
Levelized Cost of Energy (LCOE): Where De Aar Sits Economically
Using typical O&M and financing assumptions for South Africa, De Aar’s electricity likely lands in the range of: USD 0.04–0.06 per kWh
Compare that to South Africa’s alternatives:
- New coal: USD 0.12–0.16/kWh (Medupi/Kusile overruns)
- Diesel peakers (emergency power): USD 0.35–0.45/kWh
- Utility-scale solar: USD 0.03–0.05/kWh
- Gas (imported LNG future): USD 0.07–0.11/kWh
Wind at $0.04–$0.06/kWh is cheaper than coal, cheaper than gas, dramatically cheaper than diesel, and nearly equal to the cheapest solar.
Economically, this is why wind is no longer an “alternative.” It is a financially superior asset class.
De Aar produces enough energy for 300,000 households every year
But the more important metric is offset cost:
- De Aar displaces high-cost diesel peaking plants used during load-shedding hours.
- If even 25% of De Aar’s annual output replaces diesel generation, South Africa saves USD 60–90 million per year in avoided diesel costs.
Renewables don’t just add power, they replace the most expensive power first.
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What African Countries Should Learn from De Aar
Lesson 1: You don’t need offshore wind to achieve high efficiency.
Good wind locations + modern turbines = 35–40% capacity factor.
Lesson 2: The sweet spot is USD 1.4–1.7 million per MW.
Anything significantly higher becomes economically unattractive unless subsidies exist.
Lesson 3: Scale matters.
244 MW projects reduce per-MW cost dramatically through bulk procurement, shared transmission, and operational synergies.
Lesson 4: Wind stabilizes national grids.
Especially in countries with costly diesel backup systems (Kenya, Ghana, Nigeria).
Lesson 5: Investors care about output → not political speeches.
A project with
✔ predictable wind
✔ strong CF
✔ clean PPA
becomes a magnet for international capital.
The De Aar Wind Power Project is important because it proves a simple truth: Africa can build world-class, cost-effective wind farms that beat fossil fuels on pure economics today, not in 2050.
