Wake Effects: An Emerging Due Diligence Consideration for Renewable Energy Lenders in South Africa
South Africa’s renewable energy sector continues to expand, supported by the Integrated Resource Plan (IRP) 2019 (Department of Mineral Resources and Energy, 2019), which provides for additional wind and solar capacity in the national generation mix, as well as by procurement under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) (Department of Electricity and Energy, 2025). In parallel, the use of Strategic Environmental Assessment processes and Renewable Energy Development Zones (REDZs) has sought to facilitate renewable energy development in areas identified as suitable from an environmental planning perspective (Department of Environment, Forestry and Fisheries, 2019).
As the number and density of wind energy facilities increase in favourable wind resource areas, wake effects and turbine-induced turbulence are emerging as due diligence issues and are receiving increased attention from lenders, developers, and environmental practitioners.
Understanding Wake Effects
Wake effects occur when an operating wind turbine extracts kinetic energy from the wind, creating a downstream zone of reduced wind speed and increased turbulence. Turbines operating downwind of the wake may experience reduced energy production and increased structural or mechanical loading, with implications for operational efficiency, maintenance, and project economics.
Historically, wake effects have primarily been addressed as technical design and wind-resource assessment considerations. However, where multiple wind farms are developed close together, wake interactions are an established consideration in project siting. They can have broader implications for cumulative effects assessment, inter-developer disputes, and the allocation of financing risk.
A Growing Legal and Environmental Risk
Wake effects have emerged as an issue in permitting objections and appeals concerning neighbouring wind energy developments. Notable examples include the appeal against the Boulders Wind Energy Facility, where the Minister initially set aside the Environmental Authorisation on 30 August 2020 following an appeal by Aurora Wind Power, on the basis that a Wake Effects Impact Assessment had not been undertaken. The Minister directed that an independent Wake Impact Assessment be conducted, subjected to public participation, and submitted to the Department for reconsideration. Following completion of the additional assessment and public participation process, a further Environmental Authorisation was granted on 17 May 2021 and subsequently confirmed by the Minister on 12 October 2021 (Erf 1050 Paternoster (Pty) Ltd v Minister of Forestry, Fisheries and the Environment and Others 2025).
A similar issue arose in the case of Grassridge Wind Power (Pty) Ltd v Bayview Wind Farm. The initial Environmental Authorisation for the proposed Bayview Wind Farm was granted on 4 February 2019. An appeal was subsequently lodged by Grassridge Wind Power (Pty) Ltd on 26 February 2019, raising procedural and substantive grounds, including the absence of a Wake Effect Assessment and the failure to consider a commercial agreement. On 14 October 2019, the Minister upheld the appeal regarding the absence of a Wake Effect Assessment and the failure to consider its findings, while dismissing the ground relating to the commercial agreement. The Minister consequently set aside the 2019 Environmental Authorisation and remitted the matter to the Chief Director: Integrated Environmental Affairs for further consideration and reconsideration. Following the appeal decision, the competent authority considered a Wake Effect Assessment and reissued the Environmental Authorisation on 23 March 2021. Two further appeals were subsequently lodged against the reissued Environmental Authorisation by the Wilderness Foundation Africa and the Indalo Private Nature Reserve Association on 15 April 2021 and 24 May 2021, respectively. At the time of the Minister’s response, these appeals were still under consideration by the Appeals Unit. The Bayview matter, therefore, demonstrates that the absence of a Wake Effect Assessment was considered material to the initial Environmental Authorisation decision, resulting in the authorisation being set aside and the matter being remitted for further consideration. The Environmental Authorisation was subsequently reissued following consideration of the Wake Effect Assessment (Department of Forestry, Fisheries and the Environment, 2021).
As wind development becomes increasingly spatially concentrated, the potential for competition for the same wind resource may increase.
The REDZ framework was designed to direct renewable energy development toward areas identified through strategic environmental assessment as c suitable for such development, thereby improving the efficiency and predictability of environmental decision-making (Department of Environment, Forestry and Fisheries, 2019). However, greater geographic concentration of projects may also increase the likelihood of cumulative interactions, including turbine wake effects, between neighbouring wind farms.
The authors are not aware of a nationally prescribed minimum separation distance specifically intended to mitigate wake interactions between neighbouring wind farms. Given that wake interactions are influenced by site-specific factors, including average wind speed, prevailing wind conditions, topography, and other turbulence-affecting factors, the appropriateness of a universal minimum separation distance may need to be considered on a site-specific basis. Renewable energy EIA guidance has traditionally focused on impact pathways such as biodiversity, visual impacts, noise, heritage resources, and aviation considerations, rather than explicitly identifying wake effects or turbine-induced turbulence as environmental impact topics requiring dedicated assessment (Department of Environmental Affairs (DEA), 2015).
This suggests a gap between formal EIA compliance and broader project risk management. A project may comply with legal and administrative EIA requirements and still face appeal, objection, performance, or neighbour-dispute risks associated with alleged wake impacts.
Why This Matters to Lenders
For lenders financing renewable energy projects, wake effects represent more than a technical design issue: they may also present a bankability risk.
Delays caused by objections, appeals, or inter-project disputes may postpone financial close, construction, or commercial operation. If wake losses are not adequately accounted for, actual energy production may fall below forecast levels used in base-case and downside-case financial models, potentially affecting revenues and debt service coverage. Disputes between neighbouring IPPs may also introduce legal and operational uncertainty during construction and operation.
Accordingly, lenders should avoid relying solely on regulatory compliance as evidence of project readiness. Environmental and technical due diligence should also consider whether cumulative interactions with existing, approved, and proposed neighbouring wind developments have been adequately identified and assessed.
Strengthening Environmental Due Diligence
The International Finance Corporation (IFC), as one of the primary sources of good international industry practice (GIIP), recognises the importance of identifying and managing environmental, social, health, safety, and technical risks throughout the project lifecycle, both in their generic environmental health and safety (EHS) guidelines (IFC) 2012) and in their EHS guidelines for wind energy projects specifically (IFC, 2015). From a lender’s perspective, robust due diligence for wind energy projects should therefore include:
- independent wake modelling and energy yield verification;
- assessment of cumulative interactions associated with existing, approved, and proposed neighbouring wind farms;
- review of relevant objections, appeals, and disputes involving adjacent developments;
- evaluation of potential long-term operational implications for project performance and financial viability; and
- confirmation that financial model assumptions adequately reflect potential wake-related losses.
These measures extend beyond demonstrating regulatory compliance; they provide greater assurance that material project risks have been identified, quantified, and appropriately mitigated before financing decisions are made.
Looking Ahead
As South Africa continues to expand its renewable energy capacity, environmental due diligence will need to evolve alongside the regulatory and commercial landscape. Wake effects are no longer only technical engineering considerations; in some contexts, they may also influence environmental approvals, project finance, and investment certainty.
Updating South African renewable energy EIA guidance to explicitly acknowledge wake effects and turbine-induced turbulence as potential cumulative risk issues could improve regulatory clarity for developers, lenders, and decision-makers. Until then, prudent developers and lenders should continue applying GIIP by incorporating independent wake assessments and cumulative interaction reviews into their due diligence and project development processes.
Ultimately, comprehensive environmental and technical due diligence remains one of the most effective tools for protecting project bankability while supporting the sustainable growth of South Africa’s renewable energy sector.
Note: This article is intended to stimulate industry discussion and does not constitute legal, technical, or investment advice.
Authors:
Zinzi Portia Xakayi, Environmental Assessment Practitioner
Aamina Saloojee, Renewable Energy Engineer
REFERENCES
Department of Environmental Affairs (DEA). 2015. Strategic Environmental Assessment for Wind and Solar PV Energy in South Africa. Available at: https://egazette.gov.za/notice/2015/4453.pdf
Department of Electricity and Energy. 2025. Independent Power Producers Procurement Programme (IPPPP) Quarterly Report: Quarter 3 2025/26 – As at 31 December 2025. Pretoria: Department of Electricity and Energy. Available at: https://www.ipp-projects.co.za/ [Accessed 20 July 2026].
Department of Forestry, Fisheries and the Environment (DFFE) (2021). Ministerial response to National Assembly Question No. 1859 (NW2087E): Bayview Wind Farm. Internal Question Paper No. 17 of 2021, 20 August 2021. Available at: https://www.dffe.gov.za/sites/default/files/parliamentary-questions/pq1859of2021_bayviewwindfarmestablishment.pdf (Accessed: 20 July 2026).
Department of Mineral Resources and Energy (DMRE). 2019. Integrated Resource Plan (IRP 2019). Link: https://www.energy.gov.za/IRP/2019/IRP-2019.pdf
Erf 1050 Paternoster (Pty) Ltd v Minister of Forestry, Fisheries and the Environment and Others (Case No. 3454/22) [2025] ZAWCHC 416 (WCC) (9 September 2025). Available at: https://www.saflii.org/za/cases/ZAWCHC/2025/416.pdf (Accessed: 20 July 2026).
International Finance Corporation (IFC). 2012. Performance Standards on Environmental and Social Sustainability. Available at: https://www.ifc.org/en/insights-reports/2012/ifc-performance-standards
IFC. 2015. Environmental, Health, and Safety Guidelines for Wind Energy. Available at: https://www.ifc.org/content/dam/ifc/doc/mgrt/ehs-guidelines-wind-energy-2015.pdf
Department of Environment, Forestry and Fisheries (DFFE). 2019. Phase 2 Strategic Environmental Assessment for wind and solar PV energy in South Africa. CSIR Report Number: CSIR/SPLA/SECO/ER/2019/0085 Stellenbosch, Western Cape.
