The Department of Electricity & Energy released a strategic framework that earmarks offshore wind as a power source for Cape Town’s expanding AI data centre market. For data centre owners, the promise is a clean-energy supply that could underpin future growth, but the roadmap also flags regulatory voids and price gaps that may push the first offshore project well beyond 2030.
The document, launched by Deputy Minister of Energy Alexandra Abrahams at the Africa Green Hydrogen Summit, identifies about 95 GW of technical offshore wind potential along South Africa’s 2 800 km coastline. Floating turbines dominate the estimate because the continental shelf drops off sharply. The framework singles out 6.4 GW of floating potential off Cape Town and 17.4 GW off Durban, both of which exceed the municipal peak demands of roughly 2 GW and 1.7 GW respectively.
Data centre operators could benefit from a dedicated clean-energy hub, especially after Cape Town secured a large data centre tenant by guaranteeing solar PV from the Northern Cape. Adding offshore wind would diversify the supply mix, potentially lowering reliance on intermittent solar and diesel backup.
Regulatory gaps
The report, prepared by the Carbon Trust under contract to the World Bank and with input from the CSIR, Meridian Economics and The Biodiversity Consultancy, notes that South Africa currently lacks a mechanism to grant exclusive rights to offshore wind sites. The Marine Spatial Planning Act of 2018 does not spell out how to designate such areas, and the national marine spatial plan is still being drafted. Without clear rules for site leasing and exclusivity, developers face uncertainty that could add years to project timelines.
Energy Minister Kgosientsho Ramokgopa stresses that the framework is not a procurement plan or a commitment of public funds. Decisions will still be guided by the Integrated Resource Plan (IRP), affordability, system need, bankability, environmental authorisation and grid readiness.
Cost considerations
Even under the most optimistic scenarios, the first offshore wind farm would not be commissioned before 2035. Fixed-foundation sites near Saldanha Bay and Coega are modelled at US$94 to $116 per megawatt-hour (MWh) in 2035 dollars. Floating turbines, which would dominate the fleet, start at US$97 to $126 per MWh. By comparison, on-shore wind procured through the Renewable Energy Independent Power Producer Programme averaged $32 per MWh in 2021, roughly R0.49 per kilowatt-hour at the exchange rate then.
The framework projects three pathways to 2050 to 5 GW, 15 GW or 40 GW of offshore capacity, delivering roughly 6 %, 16 % and 26 % of national demand respectively. Only the 40 GW scenario brings floating wind costs down to $47-$60 per MWh by 2050, but it would require building 2.5-3 GW of capacity each year through the 2040s and expanding port infrastructure at Saldanha Bay, Richards Bay or Durban.
Environmental constraints also loom large. Marine protected areas, key bird habitats and shipping lanes are excluded outright, while fisheries, offshore petroleum rights and subsea cables need further assessment.
For data centre investors, the framework offers a glimpse of a future clean-energy supply but also signals that significant policy work and capital investment are needed before offshore wind can become a reliable power source. Companies considering South African AI data centre projects should monitor the forthcoming amendments to the Marine Spatial Planning Act, the inclusion of offshore wind targets in the next IRP update, and the development of port facilities capable of handling large turbine components.
Read more about the implications for the tech sector in our Tech & Telco coverage.
Offshore wind has been slower to develop in South Africa than onshore wind or solar, largely because the country’s Renewable Energy Independent Power Producer Procurement Programme was originally designed around onshore technology, leaving offshore projects without a clear procurement pathway of their own until more recently. Linking an offshore wind framework explicitly to AI data centre demand reflects a broader shift in how new generation capacity is being justified, not just as replacement power for an ageing coal fleet, but as dedicated supply for a new category of large, always-on industrial consumer that data centres represent. The Department of Electricity and Energy’s own renewable procurement framework sets out the regulatory context this offshore push sits within. For related coverage, see this site’s Energy and Infrastructure coverage.
